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Thursday, July 11, 2013

August 2013 RUT Bear Call Spread

Today I sold a RUT Credit call spread as follows:


Sold 5 RUT August 1080 Call @3.50
Bought 5 RUT August 1085 Call @2.80

Credit 0.70 ($350)
Max Risk 4.30 ($2150)
Probability of success: 80%
Days to expiration 35

With almost 80% of stocks above their 20 SMA, McClellan oscillator over +200 and Stochastics over 90 I believe this parabolic run needs a rest.

Finally a chart of RUT at market close for future reference

(Click on image to enlarge)

This is the second position of the August 2013 expiration cycle. The other one is the SPX 1435/1440/1700/1705 Iron Condor.

Check out Track Record for 2013

Related Articles
Weekend Portfolio Analysis (July 14, 2013)
Weekend Portfolio Analysis (July 20, 2013)
Weekend Portfolio Analysis (August 4, 2013) 
Closed August RUT Bear Call Spread for profit


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2 comments:

  1. I believe a pause is in order. But who am I to say what the market should do. For all I know, it can keep running up to 1700 before pausing. This market is dangerous for credit spread traders selling bear call spreads.

    ReplyDelete
  2. And I totally agree with you pal. Will probably adjust the SPX Iron Condor tomorrow.

    ReplyDelete