On Friday’s Options Action, the crew analyzed the performance of small cap stocks. Small caps have underperformed the overall market recently and has the potential to catch up. Coupled with an inverted head & shoulders pattern and breakout higher, a rally is likely. Expecting IWM to trade higher, Michael Khouw suggests buying a June 157 Call for a $4.80 Debit. As of Friday’s close, these calls were trading at a $4.93 Debit.
We’ve structured this trade in OptionsPlay so you can analyze and view this trade along with the supporting technical chart at your convenience. You can also view the Options Action’s video by clicking on the following link: IWM Options Action Video