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Buy Call IWM

August 8, 2023
Sell Your IWM August 177/203 Bull Call Spread

The market has come under some pressure the last week, which has caused the IWM to fall below our stop level. Let’s sell the August 177/203 Bull Call Spread that we bought for $9.70 for $14.40 approximately.

To execute this trade you need to:
Sell to Close your IWM August 177 Calls
Buy to Close your IWM August 203 Calls

Should the market continue to weaken, we could sell more. But for now, let’s stick with our longer-dated positions.

July 18, 2023
Adjust Existing Position: Against IWM August 177 Calls, Sell the IWM August 203 Call (exp. 8/18) for $1.50 or more.

The IWM is trading at a multi-month high today at 196, and looks soooo much better than it did March through May. And while I like the IWM, which is why we are holding the August 177 calls, because we only have one month left until this position expires, today I want to sell an out-of-the-money call to offset some of our premium/decay at risk.

To execute this trade you need to:
Sell to Open the August 203 Call

After this call sale our new position will be:
Long IWM August 177 Call
Short IWM August 203 Call

The ideal spot for this trade is at 203 or above on August expiration.

This call sale will be a mistake if the IWM explodes well past 203 by August expiration. However, in that scenario our bull call spread would be worth $26, or a profit of approximately 150%.

March 22, 2023
Roll Existing Position: Sell your IWM August 185 Call, and Buy the IWM August 177 Call (no new capital at risk)

The market has somewhat stabilized since the “banking crisis” of two weeks ago, and I’m encouraged that perhaps, maybe, the market is strengthening yet again.

Because of this, today let’s roll our IWM calls so that we have the best bullish exposure possible with our IWM position.

And while I’m encouraged by the stability in the market, the Federal Reserve will announce its stance on interest rates this afternoon, which could send the indexes yet again into a tizzy. For that reason, I am not putting any new capital into our trade.

What I mean is, if I currently own 10 of the August 185 calls that are trading at $7, I am going to sell those calls and collect $7,000, and then buy 6 of the August 177 calls for $11.50 (approximately).

To execute this trade you need to:
Sell to Close the IWM August 185 Call
Buy to Open the IWM August 177 Call

We took profits of 34% on half of our trade in early February, which means after this roll we won’t have a large position. Regardless of that, I want to own calls that have the best chance of success, which is why I am rolling.

Please note, this adjustment will be a mistake if the IWM explodes WELL above 210/220 as we will own fewer calls.

Finally, this roll should not be thought of as Jacob turning bullish/bearish. Instead, it’s a way to get better exposure should the index rise.

February 2, 2023
Sell Half of Existing Position: Sell Half of your Russell 2000 (IWM) August 185 Calls for $20.50 or more.

The market exploded higher yesterday following the Federal Reserve announcement, which is a positive development for our half position in the IWM August 185 calls, that are now at a potential profit of 35%. Let’s lock in a profit on half of that position today.

To execute this trade you need to:

Sell to Close Half of your IWM August 185 Calls

As is always the case when we sell half, we hope this initial sale is a mistake, and the balance of the position trades much higher in the weeks/months to come.

January 12, 2023

Half Position: Buy Half of a Position of the Russell 2000 (IWM) August 185 Calls (exp. 8/18/2023) for $16 or less.

Very quietly, since Christmas, the indexes have staged a solid rally of approximately 5%. While it’s not the boom times of the late 1990’s, or 2021, perhaps more encouragingly, the rally has been slow and steady, and has been led by a “rolling bull market rally.” What I mean is the rally’s leadership has been moving day-to-day from the industrials, and then to the financials, and then mega-caps, and so on.

Because of this encouraging action, today I want to add a half position in the Russell 2000 (IWM) which, aside from the Dow Jones, is the first of the major market indices to break above its 50- and 200-day moving averages, and will give us bullish exposure to a market rally should it truly get going.

To execute this trade you need to:
Buy to Open the IWM August 185 Calls

The most you can lose on this trade is the premium paid, or $1,600 per call purchased.

The risks I see in this trade are the obvious … should the market implode yet AGAIN, our calls will likely fail.

That being said, having taken partial profits in LVS and VALE this week, which lowered our market exposure, and with the VIX falling below 20, and more and more stocks showing signs of life, the risk/reward in buying a half position in the IWM looking for a further rally this year is right.

Position (Original)
IWM August 185 Call
Position Strategy
Buy Call
Opened Date
January 12, 2023
August 18, 2023
Net Price

Jacob Mintz is a professional options trader and editor of Cabot Options Trader. Using his proprietary options scans, Jacob creates and manages positions in equities based on unusual option activity and risk/reward.