The iShares Russell 2000 ETF (IWM) is particularly interesting for swing traders, as it tends to trade within predictable ranges over extended periods.
Given that IWM is trading at the top of the new trading range, I'm considering a bearish trade on IWM.
With $242 as the upper bound of the range, I'll sell a $245 call option, just above the current resistance level.
The trade As mentioned earlier, the trade structure I am using here is called a "bear call spread," also known as a "call credit spread".
To construct my trade, I need to sell a $245 call option and buy a $250 call option as a single unit.
Persons:
Russell, IWM, Nishant Pant
Organizations:
Trump, CNBC, NBC UNIVERSAL