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April 30, 2013  Tue 11:13 AM CT

RUT: SEE CHART GET CHAIN FIND STRATEGIES
A put spread is targeting the Russell 2000 as the small-cap index continues to inch higher.

optionMONSTER systems show that a trader sold 2,058 May 870 puts for $3.80 and bought 4,116 May 790 puts for $0.25. This is a so-called backspread that is mainly focused on keeping the net credit of $3.30, which will the profit if the RUT is above 870 at expiration. But the additional lower-strike puts mean that this can also profit if the index drops sharply. (See our Education section)

The RUT is up fractionally at 945.16 in early afternoon trading. The index has been climbing back toward its all-time high of 954 set earlier in the month.
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Education & Strategy

Gamma

As we continue to discuss the Greeks, we come to the first of the strike based Greeks called Gamma. Gamma is known as the second derivative, while delta is the first.

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