August RUT Credit Call Spread

Demo-trading:
SELL 3 RUT August 860 Call (@3.20)
BUY 3 RUT August 870 Call (@2.00)

Credit: $1.20 (1.20 * 100 * 3 = $360)
Margin: $8.80 (8.80 * 100 * 3 = $2640)

Break-even point(s): 861.20 (Currently at 808, RUT index would need to go up around 53 points in the next 45 days to cause a loss. That's about a 6% increase)
Probability of success: 80.75%
Days to expiration: 45
Max return on margin: 13.64%
Commissions: $9.00 (Assuming a very unfavorable $1.50 per contract)

Order execution:
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Profit picture:
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Basically, RUT would have to make a new high for the year in order for this position to be a loser.

(Click on image to enlarge)

 I'm playing it based on how "slow" summer markets tend to be. If the markets rally hard, and RUT hits 855 I will be adjusting this position.

Check out demo-record


Related articles:
Weekend Portfolio Analysis (07-08-2012)
Weekend Portfolio Analysis (07-23-2012)
Weekend Portfolio Analysis (07-28-2012)
Weekend Portfolio Analysis (08-05-2012)
Weekend Portfolio Analysis (08-12-2012)
Weekend Portfolio Analysis (08-18-2012) 

 
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