Apparently investors are worried enough about the strength of the U.S., and global, economy and financial system that EEM continues to fall even with the energy and materials sectors (which feature prominently in the EEM portfolio) going gangbusters. The fund is now trading below its 20-, 50-, and 200-day moving averages, and it’s crossed our projected lower break-even point ($143.70).

With increasing implied volatility, the lower break-even actually has moved down almost $4—but we want to adjust this trade now anyway, for two reasons. First, if EEM continues to drop, or trade sideways, the odds of reaching our 15%-20% profit target will start turning against us. Second, we’re going to want to roll our short options out to July, and we don’t want to start out the new cycle with a triple-calendar—especially one with such a bullish bias. Therefore, we’re unwinding our May 16th adjustment, as follows:

-1 EEM Sept 160 call
+1 EEM June 160 call
for a net credit of $2.55;

-1 EEM June 140 put
+1 EEM Sept 140 put
for a net debit of $6.75.

This will put us back our original, 140/150 double-calendar, with our new break-evens at $137.10 and $154.20. We’ve cut our delta from more than 60 to 43 and boosted theta from about 16 to 27. We’re now well-positioned for continued selling, or a sudden reversal, as well as for our July EEM Calendar Options trade.