Joe Tigay's Russell 2000 Index ETF Trade

Joe Tigay of Equity Armor Investments shared with the viewers of Bloomberg Markets his bullish options strategy in iShares Russell 2000 Index (ETF) IWM.

He thinks the best way to trade the ETF is to get out of the stock and to get long with a cash covered put. Specifically, Tigay would sell the May 132 put for $1.68. If the stock stays above $132 at the May expiration, Tigay is going to collect the premium. The trade is going to lose money, if iShares Russell 2000 Index (ETF) closes below $130.32 at the May expiration, which is 4.34 percent lower than the closing price on Wednesday.