IWM Diagonal Spread Update
The stock option trade is profitable, but let's consider reducing risk and enhancing our trading profits.
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This profiled adjustment to the IWM Diagonal Spread is offered for your educational benefit, not as an option trading recommendation. You should always do your own analysis before trading any stock or option position.
The goal of the adjustment was to reduce risk of loss in the event IWM reverses direction. Consideration is also given to enhancing profits, in expectation that IWM will not trade significantly higher of the next few weeks.
Our trade has been taken from a risk profile that had a maximum risk of nearly $1,000 to a position that has limited risk to $400, while increasing the maximum profit potential.
Additional Stock Option Trading Resources
Excel Option Calculator
See your option positions before you
open your trade.
Volcone Software
Should you be a buyer or seller? It all
depends upon your assessment of IV.
