A bullish put spread on the Russell 2000 ETF $iShares Russell 2000 ETF(IWM)$ can be used to profit from a moderate price increase while limiting downside risk. Here's how it works:
* Sell a put option with a higher strike price (e.g., $240) and buy a put option with a lower strike price (e.g., $224) for the same expiration date.
* Collect the net premium (difference between the premiums received and paid).
* The maximum profit is capped at the net premium received.
* The maximum loss is limited to the difference between the strike prices minus the net premium received.
This strategy is suitable for investors who are bullish on IWM but want to limit their risk.
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