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Price Breaks Provide Option Profits in $IWM
In our TNT Options Trading Service on February 25th, we talked about the Russell 2000 (RUT). After watching the trend and the other major indices, we suggested simple targets for $RUT if it should break and make a run either above or below its 200-day SMA. We chose the iShares Russell 2000 ETF (IWM) as […]
In our TNT Options Trading Service on February 25th, we talked about the Russell 2000 (RUT).
After watching the trend and the other major indices, we suggested simple targets for $RUT if it should break and make a run either above or below its 200-day SMA. We chose the iShares Russell 2000 ETF (IWM) as our trading vehicle. The RUT had opened and run higher in the morning on Monday, Feb. 25th, but closed lower just off its 200-day SMA. The next trading day, the RUT opened right on the 200-day SMA, and quickly moved lower, offering an entry into an $IWM put position as the index fell to its $1582.20 flat-line, offering an opportunity to roll the put position, and lock in profits while maintaining the same position size. The index continued to move lower intraday, but the next day it would make a reversal above the prior day’s close, triggering an exit, and for the next couple of days chop just below the key $1582.20 flat-line. It wasn’t until Friday, that the index made a move back above the flat-line, where nimble traders were able to play the upside break and take advantage of the move into the end of the day, and week:
Subscribers took advantage of these opportunities and were able to profit about 40% on the downside move and 25% on the upside break in the Russell 2000, by trading the ishares Russell 2000 ETF (IWM)!