Stock / Symbol: Russell 2000 / RUT
Option Strategy: [private_monthly]bear call spread, adjusting to bull put spread[/private_monthly]
Trade entry date: Jun 19
Price at trade post: $788.49
Price at this post: $766.50
Current Position:[private_monthly]
Short -1 RUT Jul12 840 call
Long 1 RUT Jul12 850 call
for a net credit of $0.65 per contract
Adjustment: When putting this trade on, we mentioned the possibility of adding a [private_monthly]bull put spread on a market pullback. With the pullback we've had since entering the trade, this is a good spot to add on the put spread and take off the call spread as we've reached 70% of it's max profitability. Our order will be priced such that we shouldn't be paying more than 0.20 to buy back the call spread. The short puts have a delta of 0.06 and the probability the put portion of the trade trade expires OTM is 93% .[/private_monthly]
Trade / Adjustment Details:[private_monthly]
BTC -1 RUT Jul12 840 call
STC 1 RUT Jul12 850 call
STO -1 RUT Jul12 680 put
BTO 1 RUT Jul12 670 put
for a min net credit of $0.25 per contract (GTC, limit order).
Requirements:
Cost/Proceeds ($25.00)
Option Requirement $1,000.00
Total Requirements $975.00
Estimated Commission $12.95
[/private_monthly]
Max Risk: $915 (adjusted down from $940)
Max Reward: $85 or 9.3% (adj up from $60 / 6.4%) at/over $680 by Jul 20
Profit Range: $679.75+ by Jul 20
Suggested Upside stop: NA
Suggested Downside stop: @ $725
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