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Wednesday, May 8, 2013

June $RUT Credit Call Spread

Today I opened a RUT Bear Call spread in June as follows:

SELL 4 June 1025 Call @2.40
BUY 4 June 1030 Call @1.90

Credit: 0.50 ($200)
Max Risk: 4.50 ($1800)
Max return: 11.11%
Days to expiration: 43
Probability of success: 81.06%

With the markets on steroid, I'm opening this trade when it looks clearly ovebought:
Stochastics: 99
McClellan: 186
79.54% of stocks above their 20SMA

Finally a chart of RUT for future reference

(Click on image to enlarge)

Check out Track Record for 2013

Related Articles:
Weekend Portfolio Analysis (05-18-2013)
Weekend Portfolio Analysis (05-26-2013) 
Weekend Portfolio Analysis (2013-06-02)

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  1. Are you also going to sell a bear call spread on SPX? That index is pretty overbought too.

  2. No Jonathan. Because I already have 2 Bear Call spreads in June. SPX 1660/1665 and RUT 1025/1030. In fact my goal now is to get rid of one of them as soon as possible