Short on IWM with good R:R (Debit spread)

12 thg 5, 2017

Directional play on IWM. With an implied volatility rank of below 10 I decided to buy some options (Yuck!)

I am basically betting that the price will go down below $137 in the next 35 days enough for us to take some profits. The good thing about this trade is that we have basically a 50/50 chance to make money (48% probability), but we have a nice Reward Risk ratio (1.5:1).

The trade:

Buy 138 Put
Sell 136 Put

Bought it for 0.80 per contract

Max loss per contract = $80
Max Win per contract = $120

17 thg 5, 2017

Giao dịch đang hoạt động

A nice -2.66% day got us into the green, now we improved our probabilities. A little bit of time or more downside move will get us to our target by the end of this week.

16 thg 6, 2017

Đóng lệnh: dừng lỗ

After the bull run on IWM we got ourselves in a losing trade. I did add a Put credit spread to reduce my cost basis and my max loss.

The original trade I made 10 contracts so my max loss was $800. The Put credit spread added $250 so my loss for the trade ended up at $550.