The market has made a fairly nice pull back today. After checking my positions it appears the IWM trade I placed yesterday needs an adjustment. After looking at the possible adjustment opportunities I decided to buy back my spread and open a Double Calendar. After buying back the IWM spread from yesterday that trade was a net loss of ~$250, which was about a 8% loss on the trade.
The new double calendar trade is:
Feb 2011 78 Call/76 Put
Mar 2011 78 Call/76 Put
Margin requirement and risk on the trade is the purchase cost of $980 with a max potential profit of ~ $686. This would be a potential profit of 70% on the trade, although I will be looking to take profit several days before the front month expiration.
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