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Saturday, October 19, 2013

November 2013 RUT Call Credit Spread


This trade was entered yesterday as part of the November options expiration cycle.

Sell 4 RUT 1160 November Call @1.70
Buy 4 RUT 1165 November Call @1.30
Credit: 0.40 ($160)
Max Risk: 4.60 ($1840)
28 days to expiration.


The market's looking overbought now and chances become higher for a pullback or some sideways action.

Even if RUT continues in this uptrend, as long as it doesn't suddenly accelerate, the uptrend channel points to a 1145 high by November expiration. So, I consider my 1160 strike relatively safe (yellow horizontal line).

(Click on image to enlarge)
Stochastic at 99
McClellan at +188
75% of the stocks are above their 200 day simple moving average.
All the stars are aligned!


Check out 2013 Track Record

Related Articles:
Weekend Portfolio Analysis (October 26, 2013)
Weekend Portfolio Analysis (November 2, 2013)
Weekend Portfolio Analysis (November 9, 2013) 



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2 comments:

  1. I like your position better than mine. You were able to get in for 10 points higher than my 1150/1155 for the same credit. I am curious why you did not sell a bull put spread a couple of weeks ago when we were oversold. You could have gotten the 940/935 for $.45 credit or more like I did.

    My plan with this RUT iron condor is to roll the 940/935 up to 1050/1045 if market drops next week. I want to roll for an additional .30 credit. I know this is aggressive but we are still in a bull market, the world economy is doing much better and we still have the Fed putting the gas to the metal on QE. The big lesson that I learn this year is that bull put spreads are easier to roll for a smaller debit than bear call spreads. Markets tend to correct quickly and march higher slowly. The only trouble I had in the last 2 years were with my bear call spreads. Never with the bull put spreads.

    In the event that RUT keeps marching higher, I will adjust the 1150/1155 bear call spread when RUT is around 1145.

    ReplyDelete
  2. Hey buddy,

    I did, I sold the RUT 970/975 Bull Put spread during that sell off http://www.the-lazy-trader.com/2013/10/SPX-Credit-Put-Spread-Adjustment-RUT-Bull-Put-Spread.html
    But I used October options. Couldn't do it in November too as I didn't want to have 100% of the capital locked, and I was about 80% invested at that point.

    Your plan looks good. And your lessons this year are valuable, I think many traders have realized that. Selling credit spreads has been a great cash cow for the last few years, but now we are facing a more challenging scenario. Just part of the process man.

    Thanks,
    LT

    ReplyDelete