The Russell 2000 continued to push higher yesterday and today and that triggered yet another upside adjustment for the Put Butterfly. Today I added a 112/117/121 Put Butterfly for a .85 debit. I was hoping to see IWM back off a little bit this week and that might still happen, but today it made sense to stretch out the expiration breakeven point on the upside. In the video below I go through my reasoning for making the adjustment, take a look at price, and explain why I chose to buy another butterfly instead of a call debit spread.
The position is still down money, but it’s not completely destroyed. Time is going to become more significant now that we’re within 40 days to expiration and I’m still hoping that IWM decides to turn around a little bit so I can stop adjusting on the upside. This definitely hasn’t been the easiest expiration cycle for a neutral to bearish trade. Enjoy.
Happy Veteran’s Day and thanks to everyone who has served or is serving.
Here’s the video: