Thursday, August 27, 2009

08/27 RUT Iron Butterfly

Not such a huge move in profits, but we're moving a few percentage points per day, that's a good recovery pace. I also added a long OCT contract Today to keep the deltas under control sort of speak. After the market closed, I went back to my profile and realized I would be better off by rolling one of the short SEP 650 Calls using a debit spread.

Depending on where we are Tomorrow, I might do just that and sell some of the long OCT contracts. The reason behind rolling these 650 calls is simple: They're getting too far In The Money, theyr delta is approaching 80, and there is not much time value left in them, so they're what Dan Harvey calls a "Delta Hog", as they become harder and harder to control as time goes by.

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08/26 RUT Iron Butterfly

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