Stock / Symbol: ]Russell 2000 / RUT
Price at trade post: $792.25
Option Strategy: iron condor
Max Risk: $892
Max Reward: $108 or 12% by Jan 2011 expiration
Profit Range: $705 - $835
Max Reward Price: between $705 - $835 at Jan 2011 expiration
Reasoning: This iron condor strategy is giving us a cushion of 5.4% to the upside and 11% to the downside. If anything, we feel the market is over extended here and has a greater chance of moving down than up by January expiration. The RUT has a 85% probability of closing within our profit range.
Trade Details:
[private_monthly]
Buy 2 RUT Jan11 700 Puts @ $0.93 for $186.00
Sell -2 RUT Jan11 705 Puts @ $1.17 for ($234.00)
Sell -2 RUT Jan11 835 Calls @ $1.30 for ($260.00)
Buy 2 RUT Jan11 840 Calls @ $1.00 for $200.00
for a net credit of $0.54 per contract
Requirements:
Cost/Proceeds ($108.00)
Option Requirement $1,000.00
Total Requirements $892.00
Estimated Commission $12.95
[/private_monthly]
Chart:
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