S&P 500 Butterfly July 2016 Closed, Open August Butterfly

Last week was really heavy. The BREXIT vote was all over the news and markets went crazy.

Still, my bearish butterfly was doing just fine. On Thursday and Friday, the wings at 2130 and 1990 came under pressure. It is not very often to experience a touch of the upside and a touch of the downside between 24 hours. That was a move of more than 100 points in S&P 500 Index -- Americas widest stock market index consisting of the most important companies of the country.

After the position has been opened on Mai 26 for a debit of 16.75 $, I decided to close the butterfly on Friday after the huge market drop for a credit of 23.00 $. I managed to realize a profit of 277 $ for holding period of one month.

Open of Butterfly August Position

To make use of the high volatility on Friday, I chose to open the August-Butterfly already. The Butterfly is centered with 2 short puts at 2.000 Strike. The wings are at 1.930 and 2.070 points. The chart shows the adjustment and the new lower range.

The high VIX above 25 allowed to buy the butterfly for 8.50 $. If the S&P 500 closes above 2.050, another butterfly will be opend at a higher level. Below 1.950 the butterfly will be closed and rolled down. The target is, to earn a profit of 1,000 $ before July 15. The expiration graph below shows the profit range of the whole position.