RUT Credit Spread Look Back Trade

RUT – 08/05/2016

On 8/5 with RUT trading at $1226.64 I decided to enter into a one day high risk trade. Based on momentum I believed that RUT was heading down that day but that is not the real reason I entered the trade. I was looking for a hedge trade to bring in premium to offset moves against some of my Iron Condors.

I bought the $1245 Calls and sold the $1235 Calls that both expired at the end of the day. I was able to bring in about $.30 in premium. During the day RUT started to move against me some and I decided to close two of the contracts giving up a little bit of premium. If the market had continued up I would have continued to scale out of the position but fortunately it leveled out.

When the remaining open positions expired I had made $250.00 on a risk of $9,750.00 or 2.5% in less than eight hours to help offset some of my Iron Condor problems on other trades. I really took to much risk on this trade even though it worked out.

Date

Sym

Action

Exp

Strike

Price

Cont

Type

Cost

Balance

08/05/16

RUT

BTO

8WK1

1245

-$0.05

10

Call

-$50.00

-$50.00

08/05/16

RUT

STO

8WK1

1235

$0.35

10

Call

$350.00

$300.00

08/05/16

RUT

BTC

8WK1

1235

-$0.27

2

Call

-$54.00

$246.00

08/05/16

RUT

STC

8WK1

1245

$0.02

2

Call

$4.00

$250.00

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