If you don't mind just to clarify:
1. After establishing the initial butterfly spread, are you purchasing 1 IWM call (40,50,60) points out of the money or whatever as a proxy for the stock?
2. let's say the initial spread looks something like this:
1050 (buy 1)
1100 (sell 2)
1150 (buy 1)
And now the Russel takes a 30 (or 40, or 50) point drop to 1070~.
Do you wait until it drops below 1050 to roll down, or are you rolling down now because it dropped more than 20 points below your middle strike?
And, if and when you do roll down do you also purchase another IWM call at the same time? Roll down your first IWM call? Or let it stand?
Thanks
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