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RUT at 1398
We’re going to scale in Broken Wing Butterfly, starting with Tier 1 about 20 points below current market price and we’ll add Tier 2 and Tier 3 as RUT moves higher.
Here’s my plan to scale this trade:
T1: 1310/1380/1440
T2: 1330/1400/1460 (at 1420)
T3: 1350/1420/1480 (at 1460)I will look to start rolling Tier 1 up 60 points when RUT trades above 1470. I’m looking to make 15% ROR and I dont want to lose a lot more than what I’m looking to make.
Planned capital for this trade is around 8,000-10,000
IWM can be used instead of RUT as it is a 1/10 size contract.
Order Ticket Type Asset Duration Strike C/P BTO RUT 31AUG 1440 PUT STO X2 RUT 31AUG 1380 PUT BTO RUT 31AUG 1310 PUT Total Debit: 4.10-4.30 RUT at 1476
I have not had a chance to add Tier 2 or Tier 3 yet. For now, I will roll 1140 put down 20 points to 1420. This will bring in a credit that will eliminate all risks on the upside. I will still look to add Tiers 2 and 3
Order Ticket Type Asset Duration Strike C/P Sell To Close RUT 17JUL 1440 PUT Buy To Open RUT 17JUL 1420 PUT Total Credit: 6.5 RUT at 1489
I’m going to add a balanced butterfly, centered at 1460 with 60 point wings. This will re-balance NET delta to slightly negative and boost theta.
Order Ticket Type Asset Duration Strike C/P BTO RUT 31AUG 1520 PUT STO X2 RUT 31AUG 1460 PUT BTO RUT 31AUG 1400 PUT Total Debit: 8.65 RUT at 1539
With 26DTE I am looking to eliminate upside risk and keep my NET delta relatively flat.
I am going to roll 1520 put down 20 points, taking in a credit (which will remove upside risk) and this move will increase BPR by about 1,350 per 1 contract
Order Ticket Type Asset Duration Strike C/P Sell To Close RUT 31AUG 1520 PUT Buy To Open RUT 31AUG 1500 PUT Total Credit: 6.60
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