RSX Long Put Spread

What’s that twinkle in comrade Putin’s eye? Why, it’s palladium, of course! /PA hit a record high yesterday, and as Russia is the largest palladium producer, the oligarchs must be grinning widely. The spike in prices had something to do with demand from the auto industry for catalytic converters and news that Russia won’t be shipping out any scrap palladium to the rest of the world. Or, it could be Putin just screwing with the market. Russia’s ETF, RSX, has followed /PA’s rally, and is now back up to the high prices it made in early Feb. If palladium is all that RSX has, though, how long can it stay up if /PA reverses (which it may, or may not do)? But if you’re a contrarian trader, then a bearish strategy in RSX might be calling out to you. The long put vertical that’s short the 21 put and long the 22 put in the April weekly expiration with 37 DTE is a bearish strategy that has a 69% prob of making 50% of its max profit before expiry and that generates $.20 of positive daily theta.

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