3/7/17 Rut Calendar
RUT is trading now at 1383. I would look to establish a calendar position by selling one March 24 exp 1380 put, and buying one Apr 7 exp 1380 put at around $7.00.
My profit target is 10% so I would enter an order to sell my calendar for $7.70
When do I adjust?
I will adjust when the price comes within a 5 point range of break even which would currently be 1355 on the downside and 1406 on the upside. Create another calendar with the midpoint 15 to 20 points away from where RUT is trading at that time, which would cut the position delta by 2/3 with the adjustment. I would then take off at a 10% gain or loss.
If you would like to learn more about calendars, take a look at a recent webinar that we did on calendars.