Wednesday, May 5, 2010

05/05 NDX Iron Butterfly – MAY/10






As we opened Today bellow the 1940 level I decided to make an executive decision and lift my lower adjustment, moving it further down to 1935 level. My thinking behind it was that we opened with such a gap down that it seemed logic it would try to trade back up and fill the gap. If I was wrong the contingent would trigger at 1935 and I would be down an extra -1% ROI, so it seemed worth for me to do it this way rather than blindly locking the trade down with the extra put.
Worked out ok, now with the advantage of time decay and reduced vols I can leave my down-side adjustment at 1935 and maintain the same P/L level as Yesterday with the adjustment being 10 points further out.

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