Small-cap stocks are back down to where they bottomed out last summer.
Can they do it again?
I believe they can, and that’s the bet that we’re making.
Here’s what the Russell2000 Index ETF looks like:
I was talking to Sean about it earlier today and couldn’t believe we were getting so much juice to sell the 155 puts.
That’s 20 points away, and only going out ’til October.
We’re collecting the exact amount that we need to pay for the 190 calls.
I like this Risk Reversal trade very much.
But here’s the best part. The risk management is so clean.
We’re going to unwind the entire trade if $IWM closes below 170 at any point.
And that’s my favorite thing about this trade – the active risk management.