Stock / Symbol: Russell 2000 / RUT
Option Strategy: [private_monthly]bear call spread[/private_monthly]
Price at trade post: $785
Reasoning: Taking advantage of the market's recent recovery by [private_monthly]entering a bear call spread on RUT here. If the market pulls back significantly, we'll look to add a bull put spread, making this an iron condor. If RUT trades up to $820, we'll either stop out of the trade or adjust by rolling to a further out of the money spread. Probability of success on this trade is 93% and the short calls have a delta of just .07.[/private_monthly]
Trade Details:[private_monthly]
STO -1 RUT Jul12 840 call
BTO 1 RUT Jul12 850 call
for a min net credit of $0.60 per contract (day order, limit order). If not filled today, ok to try again tomorrow.
Requirements:
Cost/Proceeds ($60.00)
Option Requirement $1,000.00
Total Requirements $940.00
Estimated Commission $12.95
[/private_monthly]
Max Risk: $940
Max Reward: $60 or 6.4% between $0 and $840 by Jul 20
Profit Range: $0 to $839.40 by Jul 20
Suggested Upside stop: @ $820
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