Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your experience. Save up to 40% More details

Trade Alert: March 3

By Kirk Du PlessisStock MarketsMar 03, 2013 08:53AM ET
Trade Alert: March 3
By Kirk Du Plessis   |  Mar 03, 2013 08:53AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
Today we are opening the new position as follows:

Trade: Sell IWM 94 April CALL & Buy IWM 95 April CALL

Premium: $25 (0.25) Net Credit or better per contract

Underlying Price: $90.89

Max Return: 33%

Break-Even Price: $94.25

Time Until Expiration: 47 Days

Probability of Loss: 23.19%

Trade Explanation: Short of the quick move down we had 2 weeks ago it seems we are trying to test the highs once again. Yet trading into the close last week was less than convincing for the bulls. All this adds up to a new trade.

With volatility still heart-breakingly low the only choice we have on credit spreads is to move closer into the market, collect more premium and give ourselves enough time to take profits early.

As with the TLT and DIA trades we have also put on this year the goal for this spread is not to hold until expiration if we can exit early with a profit (say around .10-.15). Trading the expiration month out to April gives us some wiggle room to let the market work through this fresh round of highs.


The charts do show weakness but this is a straight odds trade – high premium with much smaller risk profile than a typical spread in the SPX, RUT, etc. Our short strike has a 23% chance of closing in the money so we are effectively trading with 77% chance of success.

For this trade we are only risking roughly $75 in margin requirement per contract to possibly make $25 in premium collected on this trade by expiration – making an solid gain of 33% overall if held all the way. As always, if you are having trouble getting filled, try legging into the spread (i.e. buy the higher call first and sell the lower call in separate orders).
Trade Alert: March 3

Related Articles

Trade Alert: March 3

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email