Below is a daily chart of SPDR S&P 500 ETF (SPY), $233.65.
Trade: Under $233.14, we recommend buying 10 Apr $235.5 puts (24 DTE) puts (currently $3.06 x 3.08/share).
Technical Setup: Retracement after Bearish Wide Range Bar (–WRB) daily breakdown from Double Top.
Option Strategy: Long Puts. 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: $235.52. If trades under $233, then move stop to $234.52.
Adjustments and Comments on Open Advisory Letter Trades (Note: We are only reporting current adjustments).
CSX –Bought 10 Apr $50/46 bear put spread for $2.18/share. Closed half at $2.90/share. Close back half at $2.60/share for $570 gain.
AMZN – Sold 10 Apr $825/815 bull put spread for $1.10/share. Closed break even on morning bounce with market uncertainty.
CF – Sold 10 Apr $28/25 bull put spread for $.33/share. Stop Loss: $28.48.
ADI – Shorted 1000 shares of stock at $81.64 for swing trade. Cover half 80.64 for $1 gain and stopped half break even for $500 gain.
ABT – Bought 10 Apr $46.5 puts for $2.20/share (under 5-Min. low of $44.51). Move stop loss $45.22. Note: Earnings 4/18.
WFT – Sold 10 Apr $6 naked puts spread for $.19/share. Bullish gap and action today. Move stop loss $5.85.
WDC – Sold 10 Apr $72.5/67.5 bull put spread for $.72/share. Move stop loss $76. 78.
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
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Twitter: @GregCapra
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