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IWM Call Spread Trade Nets 67.5% Gain Amid Technical Uptrend
A standout call spread trade in iShares Russell 2000 ETF (IWM) options caught attention after posting a rapid 67.5% gain, highlighting a divergence between short-term price momentum and broader options market sentiment.
Trade Snapshot: High-Volume Call Spread Shows Fast Profit
At 09:31:01 on October 3, 2025, a block of 1,120 IWM call spreads traded hands at a VWAP price of $0.68. By 11:30:00, the spread widened to $1.15—netting buyers an average gain of $0.46 per contract, or 67.5%. This was primarily driven by a $1.41 jump in IWM’s share price from $245.70 at trade time to $247.11. The table below summarizes the core details of this trade:
| Trade Detail | Value |
|---|---|
| Expiration | 03-Oct-25 |
| Strike Prices | 246-251 Call Spread |
| Contracts Traded | 1,120 |
| VWAP Trade Price | $0.68 |
| VWAP Bid/Ask | $0.70 / $0.73 |
| Initial Stock Reference | $245.70 |
| Gain (as of 11:30:00) | $0.46 (67.5%) |
| Stock Price After Trade | $247.11 |
Explore the Multi-Leg Trade Analyzer for More Insights
Buyers Risked $38,000 for a Shot at $242,000—Maximum Profit Requires Further Gains
The total cost for buyers exceeded $38,000, with a potential maximum profit near $242,000—if IWM closes above $251 at expiration. This profile reveals a moderately bullish stance, leveraging capital for outsized returns if the index ETF sustains its upward push.
Technical Indicators Show Bullish Momentum for IWM
IWM’s price action tells a bullish story:
- Price rose $3.09 today (+1.27%).
- It’s trading 2.7% above the 20-day moving average, 6.4% above the 50-day, and 12.7% over the 250-day average—signaling a strong uptrend.
- Compared to SPY, IWM underperformed on a 1-year and 2-week basis, but outperformed over 3 months and matched pace on the 1-month frame.
- Year-to-date, IWM lags SPY by about 3 percentage points, but recent performance shows improved momentum.
| Duration | IWM Return | Low | High | SPY Return |
|---|---|---|---|---|
| Today | +1.2% | 245.03 | 248.09 | +0.4% |
| 2 Week | +0.9% | 237.55 | 248.09 | +2.0% |
| 1 Month | +5.9% | 232.46 | 248.09 | +5.2% |
| 3 Month | +12.1% | 212.34 | 248.09 | +8.6% |
| 6 Month | +22.5% | 171.73 | 248.09 | +19.7% |
| 1 Year | +14.7% | 171.73 | 248.09 | +19.4% |
| YTD | +12.6% | 171.73 | 248.09 | +15.5% |
| 3 Year | +54.5% | 161.67 | 248.09 | +93.9% |
| 5 Year | +69.6% | 151.39 | 248.09 | +111.0% |
Price action and trend-following indicators currently paint IWM as being in an established uptrend.
Option Skew Signals a Bearish Market Stance Despite Bullish Technicals
In contrast to strong technical signals, options market data hints at skepticism. The 30-day implied volatility skew ranks in the 18th percentile (with 0% being most bearish and 100% most bullish). Historically, such a low rank signals that the market’s forward-looking option traders lean bearish on IWM, potentially as a hedge against the recent rally.
What’s the Takeaway? Divergent Signals, Tactical Opportunities
This high-volume call spread offered rapid returns on a day when technicals favored buyers. However, the options market's implied volatility skew paints a more cautious, possibly bearish picture going forward. Traders looking for similar multi-leg strategies—or wishing to dive deeper into call and put spreads—can check out the Multi-Leg Option Trade Screener for further research.
The current IWM setup underscores a key theme: even as price momentum and uptrend signals encourage optimism, professional options traders may be positioning for turbulence or downside risk. For now, the tug-of-war between technical uptrends and cautious options signals makes IWM a symbol of the market’s split mindset.
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NOTE: Stock and option trading involves risk that may not be suitable for all investors. Examples contained within this report are simulated and may have limitations. Average returns and occurrences are calculated from snapshots of market mid-point prices and were not actually executed, so they do not reflect actual trades, fees, or execution costs. This report is for informational purposes only, and is not intended to be a recommendation to buy or sell any security. Neither Market Chameleon nor any other party makes warranties regarding results from its usage. Past performance does not guarantee future results. Please consult a financial advisor before executing any trades. You can read more about option risks and characteristics at theocc.com.
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Disclosure: This article was generated with the assistance of AI