1. The RUT “Bull” Trade
Tom Clark

2. Disclaimer

7. Why I like the “Bull” trade so much
Simple – Rule Based
No technical analysis
No stock selection
No adjustments!
Check once a day
One position a month
Totally non-discretionary
Never a decision to make
No judgment calls to make

8. Trade Rules

9. Credit Spread P&L Graph

10. Why RUT? Not highly correlated with S&P 500 High priced
Smaller Cap (vs. S&P)
High priced
Index not stock
Cash Settled, Preferential Tax Treatment
No single company risk
More Domestic (less foreign exposure)
less sensitive to currency exchange issues
Volatility different from S&P 500 (RVX vs. VIX)
Highly Liquid
Not a crowded trade

22. Risk Mitigation Conservative capital allocation/management
Don’t second guess exits
Use market order w/Stop loss otherwise stay in
Early profits when presented with the opportunity
Stay out of Bear markets (how to identify?)
Take / Re-deploy profits, don’t compound
Black Swan hedge?