Experimenting with a position in TOS. Consists of a 5 contract RUT butterfly combined with a 2 contract call vertical. Price is currently in between the butterfly and the vertical. Relatively flat P/L line, near delta neutral. Current worth of the position jumps haphazardly, anywhere from -150 to +200, with changes in options pricing. With such noise, how do you determine the real current worth of your positions when you want to close them out?
On the TOS platform it will give you a mid-price value of the butterfly and a mid-price on the vertical. During regular trading hours...especially during the am shortly after open for a couple of hours that value will tighten and be pretty valid. You should pre-determine at what point you want to close. With the fly that will be (hopefully) just before expiration and with the RUT trading very near your short strikes. Seldom does this happen...you can also close out the short vertical portion of your butterfly when you have some positive pnl on it then ride out the long vertical portion of it. IOW leg out of the butterfly if you don't want to hold until expiration. Since the RUT is cash settled its fine to hold until you are better than 50% profit or let it expire worthless. When your ready to close set the price to the mid point of bid and ask then adjust as necessary usually you only have to give up 5 or 10 cents. Personally when I've traded the RUT it was kinda of a bitch to open or close. Its just not as liquid as SPX or NDX.
The invalidity/absurdity of the prices (especially the after hours quotes) makes it next to impossible to plot any kind of strategy. It's pretty frustrating.