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Thursday, May 9, 2013

iShares Russell 2000 ETF Put Option

4/5/2013

sell 10 IWM May 2013 $81 put options at $0.22

probability of expiring in-the-money:  7.80%


5/9/2013  (with 2 seconds remaining)

buy to close at $0.01.

Net gain:  $210  (on $8000 collateral, 4 weeks)

Something to think about.....if you had $8000 in a savings account, will you earn $210 in interest in 4 weeks?  No.

Buy-to-close......this was a tough decision.  With only 6 more trading days until expiration, I could have left it alone and let it expire, but I try very hard to be disciplined and close my profitable positions.

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