New trade for our portfolio; put credit spread on RUT
I have been considering a new trade idea for the newsletter, and am planning to introduce it to subscribers next week. It is still in the "test kitchen" mode, so I am not recommending it with live capital just yet.
The trade is a monthly put credit spread on RUT, 30 points wide, entered 65 days to expiration. We are looking to sell anywhere from a .10 - .15 delta on the short put, for a minimum credit of $2.50. The maximum risk in the trade is $2,750 per contract (width of the wings less the credit received).
The trade is left in play to work until:
1) If the loss reaches $250 per contract, the position is closed.
2) When the next cycle is at the 65 days to expiration entry window, the position is closed.
The next entry date for the December 15 monthly cycle is next Tuesday, October 10, so we will look to enter the position then. I wanted to give advance notice to those who may be interested in a new trade for the newsletter, and will post an update next week. Again, our first couple of trades will NOT be with live capital; after two cycles I will look at adding the play into the mix with live capital.
Feel free to email with any questions as always.
Stay keen on your risk management and trade carefully,