Below is a daily/weekly chart of Under Armour, Inc. (UAA), $18.60.
Trade: Under $18.20 (or bounce with limit, read on), consider buying Oct (10/20) $22.5 puts (80 DTE) at mid-point (if low triggers first) or a limit of $4.20/share (current mid-point is $4.65/share) to try to get filled on a bounce. If not filled, we will re-assess tonight. This is a longer-term trade because of the bearish breakdown, and we will sell options around it to reduce cost basis.
Technical Setup: Bearish Professional Gap Breakdown daily and Breakdown on weekly with bearish Topping Tail.
Option Strategy: Long Puts (LP). Put buyer pays a premium for the right to sell the underlying asset (stock) at a specified price (strike) for a specified period of time (expiry). Long puts are used to capitalize on downside market movements with less cost (leverage) and to limit risk (to debit paid). One (1) contract represents the right to buy 100 Shares. Potential Gain is Strike Price – Premium paid (i.e., break-even point). Max Loss is Premium paid.
Stop Loss: $20.52 to start.
Happy trading! If you have any questions or comments, please e-mail Greg Capra at Greg@mastertrader.com or Dan Gibby at Dan@mastertrader.com
All the best,
Greg Capra
Managing Director and Pristine Founder
Dan Gibby
Chief Options Strategist
Chief Options Strategist
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