December 55 day $RUT bearish butterfly options trade: The finale

Seth FreudbergGeneral Comments, Options EducationLeave a Comment

On  Wednesday,  the market  gapped down and  continued it’s downward trek of the previous  5 trading days.  According to the guidelines of the   bearish butterfly strategy,  the reduced profit target of $1000 comes into effect  21 days to expiration on this lot size.  As 21 days to expiration was yesterday, and the position was up $1800, I  previously 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 on Wednesday  morning for a $1220 gain, after commissions, which makes for an 18% gain on our invested capital of $6604 or  a 12% gain on our “planned capital” of $10,000. Not bad since the  $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!

John Locke

Locke In Your Success, LLC

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