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July 31, 2013

$RUT Weekly Trade

Russell 2000 Index is trading around 1050 and it looks like it might try to retest recent highs of 1056. Today we have FED meeting that can potentially move the market, so manage your size of trade accordingly. We are going to sell 1040 put and 1050 call that expire this week and buy 1040 put and 1050 call that expire next week, that makes it a double calendar. We are entering this trade for a debit and will look to make about 15% of margin (debit). Our stop will be around 20% loss of margin (debit). We will look to close out this trade before the close of trading tomorrow.
Trade: BUY +1 DBL DIAG RUT 100 (Weeklys) AUG2 13/AUG1 13 1050/1040/1050/1040 CALL/PUT/CALL/PUT @8.30 LMT
Margin: $830 per spread
Profit Target: $125 per spread (15% of margin)
Stop: $165 per spread (20% of margin)
Duration: 1-2 days

8/1/13 Update: This trade is closed for 7.23% loss.