We’re reducing upside risk in our Supplemental Trades portfolio in two steps. First, we’re closing the 150/160/170 hedge position. The following order will take some patience, as it anticipates a retracement to IBM $166.50:
Day limit order
Sell to close 2 IBM Mar 170 puts
Buy to close 4 IBM Mar 160 puts
Sell to close 2 IBM Mar 150 puts
for a net credit of $3.38 or better.
Note that the number of contracts specified above represents our entire stake in this position. We’re closing out our positions in the March 160 and 170 puts, but we still have an open long position at 150 from our adjusted Butterfly Hedge #2. Also note that as a Supplemental Trade, this order will not be autotraded.