Bullish on Small Caps: Selling the IWM 195 Put

I just placed a short put trade on IWM (Russell 2000 ETF), selling the 195 strike expiring June 20, 2025, for a credit of $1.46. While implied volatility rank (IVR) is low at 20, this trade isn’t just about collecting premium — it’s about putting my slightly bullish market bias to work.

🛠️ Trade Setup

• Underlying: IWM (Russell 2000 ETF)

• Strategy: Short Put (Cash-Secured Put)

• Strike Sold: 195

• Expiration: June 20, 2025 (22 DTE)

• Credit Received: $1.46

• Break-even Price: $193.54

• Max Profit: $146

• Max Loss: $19,354 (if IWM → $0)

• Buying Power Effect: ~$2,000 (varies by margin)

🧠 Why I Placed This Trade

I’m slightly bullish on the market heading into June. IWM has shown signs of stability above the 200 level, and this trade allows me to:

• Generate income while staying bullish-neutral

• Build a position in IWM only if it drops to a more attractive price

• Use a simple, high-probability setup that doesn’t require constant babysitting

Even though IVR is just 20, the premium was still reasonable. At a $1.46 credit, I’m getting nearly 7.3% return on buying power in 22 days, which is solid for a trade with this much cushion.

🎯 Exit Strategy

• Targeting 50% of max profit: I’ll look to close the trade around $0.73 to lock in gains early.

• If IWM stays elevated or drifts sideways, this could happen well before expiration thanks to theta decay.

• If IWM dips near the 195 strike, I’m open to rolling the trade out to July or August to extend time and reduce risk.

⚠️ Risk Management

Yes, there’s a large theoretical max loss — but in practice, I won’t hold this position down to zero. If the market makes a significant move lower, I’ll adjust or exit. And if IWM finishes below 195, I’m fully okay taking assignment with a cost basis of $193.54.

📌 Final Thoughts

This isn’t a volatility play — it’s a bullish exposure trade with premium as the bonus. I’m looking to take advantage of near-term support in small caps while putting cash to work efficiently. If the market continues to firm up into June, this one should work out cleanly.