Dan Deming's iShares Russell 2000 Index (ETF) Options Trade

Dan Deming of KKM Financial spoke on Bloomberg Markets about a bearish options strategy in iShares Russell 2000 Index (ETF) IWM.

He thinks that the stock could drop to $130 if it breaks its $135 support and he wants to buy the March 135/131 put spread to profit from a potential decline. The put spread would cost him $0.95, which sets the break even for the trade at $134.05 or 2.71 percent below the current market price.

If iShares Russell 2000 Index (ETF) drops to $131 or 4.92 percent, the trade is going to reach its maximal profit of $3.05.