Stock / Symbol: Russell 2000 / RUT;
Option Strategy: [private_monthly]calendar spread[/private_monthly];
Price at trade post: $920
Reasoning: Because I'm expecting a bit of a pullback in the market and an increase in volatility, I'm putting on a [private_monthly] put calendar spread[/private_monthly] on RUT. In case I'm wrong, I'm setting a fairly tight upside stop at 926 (to adjust or exit). The trade's greeks are: -16.3 delta, 4.75 theta, and 60 vega. What I like about this trades use of weekly options is that it allows us the possibility of selling 2 additional expiration dates on the [private_monthly]910 strike puts[/private_monthly]
Trade Details:[private_monthly]
BTO 1 RUT Mar13 900 put
STO -1 RUT FebWk4 900 put
for a max net debit of $7.30 per contract. (day order, limit order). The current mid is $7.00. Try for mid plus .05. If not filled today, ok to try again tomorrow.
Requirements:
Cost/Proceeds $715
Option Requirement $0
Total Requirements $715
Estimated Commission $3
[/private_monthly]
Max Risk: $715
Max Reward: $500 or 70% (at current volatility level) [private_monthly] at $900[/private_monthly] by Feb 22[private_monthly]
Profit Range: between $884 and $918 by Feb 22
Suggested Upside stop: @ $926
Suggested Downside stop: @ $895
[/private_monthly]
Non-members, click here for access
