Our bearish position on the XLK continues to work against us. Since we’ve entered this trade, we’ve only had 3 partial down days and the market hasn’t traded low enough to move the needle in our favor.
Let’s manage the position by reversing it to the upside. We will close the current position and flip it to a bullish broken wing butterfly. We took in 2.39 credit when we opened the trade. We can close it for a net debit of around 4.78 but collect another 2.10 of credit which will leave us with a net debit of around 0.30 debit.
SPDR Technology (XLK): 131.31
TRADE ACTION 1: CLOSE the XLK 20 Jan 122 / 123 put and the 20 Jan 123 / 128 call broken wing butterfly for a net debit of around 4.75 to 4.80
STC the XLK 20 Jan 122 put
BTC the XLK 20 Jan 123 call
BTC the XLK 20 Jan 123 put
STC the XLK 20 Jan 128 call
TRADE ACTION 2: OPEN the XLK 3 Feb 126 / 131 put and the 3 Feb 131 / 132 call broken wing butterfly for a net credit of around 2.05 to 2.10
BTO the XLK 3 Feb 126 put
STO the XLK 3 Feb 131 put
BTO the XLK 3 Feb 132 call
STO the XLK 3 Feb 131 call
The Master Portfolio is trading 5 contracts.