Wednesday, July 2, 2008

IWM - Bull PUT Spreads

IWM trades at 1/10th of RUT ( Russell 2000 ).
Analyze a Bull PUT Spread
Buy July 61 PUT for .18
Sell July 63 PUT for .36 or .35
Credit = .18 or .17 for a 2 dollar spread.
Return about 8 - 9 % before commission for less than 3 weeks
This position enters risk should IWM fall all the way down to 63

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