An Asymmetrical RUT butterfly Trade

With RUT trading around 1360 and volatility up a bit, a trade that looks interesting is an asymmetrical iron butterfly entered below the current trading price as follows:

RUT at 1358

Sell one May 19 exp 1330 call
Buy one MAY 19 exp 1350 call
Sell one MAY 19 exp 1330 put
Buy one MAY 19 exp 1280 put

This trade gives an upside that is profitable no matter how high RUT trades and put side with the risk well below where RUT is currently trading. Take the trade off at 10% gain or loss.

Mark Fenton

mark@sheridanmentoring.com

options trading courses

1 reply
  1. Chris Horianopoulos
    Chris Horianopoulos says:

    I really like this trade. I was wondering if you think it can be as good as a 10DTE as opposed to the 30DTE trade you demonstrated?
    I prefer SPX, so if you are doing 20 wide on Call side and 50 wide on Put side, would you use same strike widths on SPX? Would you also stay with 40 points below current price with SPX?

    Reply

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