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Saturday, August 17, 2013

September 2013 RUT Bull Put spread

As tweeted yesterday I entered a RUT Bull Put spread using September options


BUY  4 RUT September 935 Put @2.75
SELL 4 RUT September 940 Put @3.10

Credit received: 0.35 ($140 for 4 contracts per leg)
Max Risk: 4.65 ($1860)
Days to expiration: 34
Probability of success: 93%

The trade was opened on August 16, 2013 at a time when only 32% of stocks were above their 20 SMA, Stochastics was at 19 and McClellan Oscillator around -230.

Here's how the chart of RUT looked after the close for future reference
(Click on image to enlarge)
With this trade, there are now two positions in the September 2013 expiration cycle: this one, and the September SPX Iron Condor(1560/1565/1760/1765)

The short strike of this RUT position (940) is comparatively below SPX 1565 of the Iron Condor. Using the powerful beta weighting feature of TOS, RUT 940 represents proximately SPX 1540 at this moment.


Check out 2013 Track record

Related Articles:
Weekend Portfolio Analysis (August 25, 2013)
Weekend Portfolio Analysis (August 31, 2013)
Weekend Portfolio Analysis (September 7, 2013) 
Weekend Portfolio Analysis (September 14, 2013)



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