IWO Trading Floor

Become a Great Options Trader

Full Time Profits, May 25th, 2018 – RUT

By

After clearing the trendline breakout, the S&P has settled into a very tight, multi-week trading range between 2700 and 2750.

Buyers are in control. The longer we hold above 2700, the higher the odds that we see continuation back to 2800.

Underneath the surface it’s a mixed bag. Energy stocks are finally getting hit hard, while the large-cap tech momentum players are finally running. See NFLX recently, AMZN is about to run, and BABA looks good for a squeeze higher.

A rotational correction in a tight range… that’s something we haven’t seen in a while. Over the past few months the volatility has led to individual stocks running on the same conveyor belt… large intermarket correlations.

To see that subside… that’s a bullish reading.

In terms of new trades, I’m not seeing setups on individual stocks that haven’t already been covered. Instead, we’ll focus on the small cap index.

Trade #1: RUT

The Russell 2000 index has already cleared to new highs, and is just having a small retest of previous resistance levels. I like scaling into spreads here and any dips.

Trade Setup

Expected Price: 1627

Sell to Open RUT Jul 1575/1570 Put Spread

Tier 1: Enter at 0.90, Exit at 0.40

Tier 2: Enter at 1.20, Exit at 0.70

Tier 3: Enter at 1.50, Exit at 1.00

Disclaimer

U.S. GOVERNMENT REQUIRED DISCLAIMER – COMMODITY FUTURES TRADING COMMISSION. FUTURES AND OPTIONS TRADING HAS LARGE POTENTIAL REWARDS, BUT ALSO LARGE POTENTIAL RISK. YOU MUST BE AWARE OF THE RISKS AND BE WILLING TO ACCEPT THEM IN ORDER TO INVEST IN THE FUTURES AND OPTIONS MARKETS. DON’T TRADE WITH MONEY YOU CAN’T AFFORD TO LOSE. THIS WEBSITE IS NEITHER A SOLICITATION NOR AN OFFER TO BUY/SELL FUTURES OR OPTIONS. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE DISCUSSED ON THIS WEBSITE. THE PAST PERFORMANCE OF ANY TRADING SYSTEM OR METHODOLOGY IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. CFTC RULE 4.41 – HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY, SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN