Russell Rebalancing Play

Russell Rebalancing Plays - TL;DR

MTH 07/21 125P for $2.25 or less
WIRE 07/21 175P for $3.85 or less
ATI 07/21 37.5P for $0.75 or less
JACK 07/21 90P for $2.30 or less
CHUY 07/21 40P for $1.45 or less
ARRY 07/21 20P for $0.80 or less
KRTX 07/21 240P for $9.15 or less

Trading Thesis - How these plays can make you money

The Russell Indices rebalance once per year. Stocks that outperform their respective Russell index will have some of their shares sold on the open market in order to bring the weight back to the appropriate proportion.

The goal is to find tickers that:

Significantly outperformed their respective Russell Index
Have institutional ownership greater than 100%
Have the top institutional owners be ETF institutions instead of private equity, or other non-ETF institutions.
Are close to that ticker’s gamma max, a second catalyst signalling medium-term short movement.

Notes - Something to give you a new wrinkle

If the price has moved past the entry price, exercise caution. Something changed between the time these plays were generated and market open.
Look to sell half your position on a double, and freeroll the rest to exit at your discretion.
I tend to risk up to 1% of my total capital on any trades I take. If my conviction is lower, I’ll only allocate 0.5% or even 0.25% of my capital to the trade, and dollar cost average in.
The trades were calculated before market open, and so are based on information up to yesterday. Keep that in mind when deciding to enter well after the fact. New price movement may invalidate the original thesis.

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