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Friday, September 14, 2012

October $RUT Bear Call Spread

Demo-trading:
SELL 6 RUT October 910 Call (@3.10)
BUY 6 RUT October 915 Call (@2.40)

Credit: $0.70 (0.70 * 100 * 6 = $420)
Margin: $4.30 (4.30 * 100 * 6 = $2580)

Break-even point(s): 910.70 (Currently around 866)
Probability of success: 82.52%
Days to expiration: 35
Max return on margin: 16.28%
Commissions: $18.00 (Assuming a very unfavorable $1.50 per contract)

Order execution:
(Click on image to enlarge)


Profit picture:
(Click on Image to enlarge)



The market needs to digest the recent moves. Markets now overbought by definition on any trading book. McClellan oscillator at 200. Stochastics overbought. 84.27% of stocks above their 20 SMA and 81.42% above their 50 SMA.

(Click on image to enlarge)



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