Today’s trade: iShares Russell 2000 ETF (IWM)
The set-up: The iShares Russell 2000 (IWM) has been moving hard on news of late, and it has news coming today in the form of the release of the FOMC minutes this afternoon, plus the tensions swith North Korea and the noise about the upcoming meeting between President Trump and Russian president Vladimir Putin.
If the Fed hints at the unwinding of balance sheets or creates the slightest notion that another rate hike is coming, I think we see a pullback today.
The play: Short the Russell 2000, which I am doing through IWM puts.
I have 500 July 14, 2017 $139 puts at 57 cents, and I am looking to sell them early next week. (I don’t want to be in them for too long, as they expire next Friday.)
I’ll make some pretty big money if the IWM starts to head towards $139, and the unwinding of the balance sheet that the Fed will talk about, along with the other big headlines should make that happen.
Jason Bond runs JasonBondTraining.com and is a swing trader of small-cap stocks. At the time this was published on RagingBull.com, as described in the article, he held the 500 options on IWM and was planning to trade them as described in the article. He had no additional shares, options or orders in IWM.