The last couple free trades, PCLN and OIH worked out nicely. Good gains in both. So here is another one.
Sell May 65 Puts, Buy May 63 Puts for a credit of .28 each spread. Get out if you are down 10-15% of the margin. if it goes well, either let it expire or buy it back at .05. I prefer to buy it back because it is 45 days from expiration. Normally you do not want to sell cedit spreads with this much time but with the volatility so low, either you move closer to the money or you go out farther in time to get a decent return.
This trade has a potential profit of 16%. This is an interesting trade because IWM is the etf for the Russell 200 index. Earnings season is coming up and that will affect IWM. Also IWM is at a 52 week high. How long can it keep going up? The talking boxes on CNBC have been calling for a correction for months now. A correction would kill this trade.
But the system I am developing is telling me this is a doable trade so I thought I would post it. I am posting the more controversial trade signals to establish a track record.
I am not using real money on this trade and neither should you. Paper trade only.