Trade Alert – (IWM) May 3, 2012

As a potentially profitable opportunity presents itself, John will send you an alert with specific trade information as to what should be bought, when to buy it, and at what price.

Trade Alert (IWM)

Sell short the Russell 2000 iShares (IWM) May, 2012 $77 puts at $0.33 or best

Opening Trade


expiration date: 5-17-2012

Portfolio weighting: 20%

($20,000/100/$) = 28 Contracts

I am going to protect my existing long position in the (IWM) $80 puts by selling short out of the money $77 puts against them on a two for one basis. This will take in some additional premium income and cut out cost in the case that the market continues to churn sideways. These expire in just two weeks and give you protection in any move in the (IWM) down to $74 during this time. If the (IWM) stays above this level at expiration you get to keep the entire premium. This would add $924, or 92 basis points to you total return on you notional $100,000 portfolio (100 X $0.33 X 28).