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June 6, 2013  Thu 4:14 AM CT

IWM: SEE CHART GET CHAIN FIND STRATEGIES
A big put spread topped yesterday's option activity in the iShares Russell 2000 Fund.

optionMONSTER systems show that a trader bought 19,000 each of the June Quarterly 94 and 82 puts for $1.15 and $0.06 respectively. At the same time he or she sold 38,000 of the 88 puts for their bid price of $0.25.

This butterfly spread cost $0.71 to open, which is the maximum loss on the trade and would be realized if it is held until expiration and shares are either above $94 or below $82. The theoretical maximum gain of $5.29 would be realized with the fund at $88. (See our Education section)

The IWM fell 1.28 percent to $96.43, its lowest close since May 9. The exchange-traded fund, which tracks the small-cap index, was above $100 last week. It has not traded at $88 since mid-January and below $82 since early December.

Total option volume in the IWM was 811,000 contracts yesterday, with puts outpacing calls by more than 2 to 1.
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Options Academy: Ron's Risk Calculation--A Real Life Example

It is rare that I get a chance to give a real-life, real-time example in my articles that the readers were not only following but were actually involved in at the time the event is happening. Well, that is where we are right now in our QQQ trade from last week. Let's recap the trade itself.

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