The market had a gap down this morning and continued it’s downward trek of the last 5 trading days. As stated earlier about the December bearish butterfly, the reduced profit target of $1000 comes into effect 21 DTE. Since 21 DTE is Thursday and the position was up $1800, I stated that I was going to close the position instead of fighting with it IF the market acted up. Well the market acted up, or should I say down 🙂 So I closed the position this morning for a $1220 gain, after commissions, which makes for a 18% gain on our invested capital of $6604 OR a 12% gain on our “planned capital of $10,000. Not bad since RUT went from 700 to 765 and back down under 680 during the duration of the trade. This rounds off an excellent year for this trade and I’m looking forward to next year!
With the M3 trade, I’ve decided to ride out the move and made some adjustments to the position. I sold both 680 put butterflies and sold the 680/690 call vertical and bought 2 – 610/660/710 call butterflies ( they are call butterflies because I accidentally bought calls instead of puts) and bought 1 – 660/670 call vertical to flatten the T+0 to the upside. The position is currently up about $900 and is shown below:
I’ll be looking to get into the January trades on Friday or Monday depending on market conditions.
That’s it for now, have a great Thanksgiving everyone! And I’ll update when January is entered.