New Income Trade in IWM

[Steven Place]

I normally look at the RUT (cash settled index) for this kind of trade, but there’s not much liquidity there so I will just go in with more size on the IWM.

Remember, IWM is 1/10th the size of RUT.

Here’s the trade I like:

Buy IWM Jan/Feb 112 Put calendar at 1.00 or lower

Starting with 1/3 size here with intent to add if I get into negative theta territory.

Profit target is 20% on debit so about 20 bucks per spread.

[Steven Place]

After some bouncing around the calendar strike, the trade is showing a nice profit of around 15% ROI.

I want to close out here becuase I don’t think IwM will stay at these levels for much longer.

[Author]

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