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Monday, April 23, 2018

June RUT Elephant

Trade Details:

SELL 20 RUT June 1410/1400 Credit Put spreads @0.60 Credit
SELL 12  RUT  June 1650/1655 Credit Call spreads @0.55 Credit

Upside and downside hedges:
BUY  12 IWM May 166 Calls @0.29
BUY    2 IWM May 144 Puts @0.98

Total Net Credit: $1,316
Days to Expiration: 53



Risk profile:
 

RUT Chart for future reference:



Trade Update - May 17, 2018

Closed the entire Call side of the Elephant:
12  RUT  June 1650/1655 Credit Call spreads @1.50 Debit
Original credit received was 0.55, so this is a net 0.95 loss per spread (-$1140 for 12 spreads)

BUY  12 IWM May 166 Calls @0.64
Original debit paid was 0.29, so this is a 0.35 gain per contract (+$420 for 12 contracts)

The Call side of the Elephant results in a -$720 loss.
The Put side remains in play, virtually a winner now very far out of the money and with a total credit collected that is greater than today's loss on the Call side, which will make the position a small net winner in the end.

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