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BookingAlpha Option Trading Advisory

Thursday, February 9, 2012

March IWM Credit Put Spread

SELL 14 IWM March 76 Put (@0.76)
BUY 14 IWM March 74 Put (@0.51)

Credit: $0.25 (0.25 * 100 * 14 = $350)
Margin: $2450 (Although this position forms an Iron Condor, so in reality no additional margin is consumed)

Order execution below:

(Click on image to enlarge)
Break-even point(s): 75.75
Probability of success: 83.70%
Days to expiration: 36
Max return on Investment: 14.29%
Commissions: $42.00 (Assuming Interactive Brokers' schema for Canadians)

(Click on Image to enlarge)
Just trying to reduce the upside exposure of the current portfolio. This position forms an Iron Condor along with the March IWM Credit Call Spread already in. Resulting in a max profit of $700 and max risk of $2100.

(Click on image to enlarge)

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