buying july 100/90 put spread around 2.60 looks like a good risk reward. Skew pretty high in the 90. Could do it as a ratio but I think the stock is broken.
how about posting a chart with your thinking? how low do you think it will go? what is your exit strategy? how long do you plan on holding? and whatever else you see that makes you believe that it is broken?
i am having difficulty posting the chart. when i figure it out, i will get it. my play is related to the skew in the options. looking at a pure numbers play, a 4 to 1 shot on a 10 pt spread is an easy one to take. If you want to tie up less capital, how about the 90 put fly for 1.75? Almost a 5 to 1 shot. The stock is trading well below its 50 ma of 106.90. It broke thru its 200 ma of 101.53 last week on high volume. Next upside target of 103 using 38% Fib retracement of latest move down. July options giving you time to play this one out.
I attached a chart. Where do you think support will be stopping your expected down move? ...95 ...Would it not be prudent to wait for a confirmation that the downtrend has resumed? Or wouldn't it be better to hold off until Monday since the front month changes and premiums could get better? How long do you plan on keeping this debit spread open if your target is not reached? Or are you planning on using the 90 put as insurance against an uptrend continuation or to reduce premiums?
Gee, I did not know there was going to be a quiz today. Based on the recent jump in implieds, prices will remain firm. Support is the recent low of 96.42. My research is quick and dirty. The result of many years on the floor.
I apoligize for offending you...I attempt to gather all of the facts before considering putting money at risk.....perhaps you have just been doing this longer and are extremely more knowledgeable than I...again I apologize.
I was planning on posting for feedback on something I've been doing some research on....I f it would not require too much of your time, when I post perhaps you could help me by "quizzing me" this could be beneficial in keeping my feet grounded.
No worries. I just like to bounce ideas off other traders to see if i am missing anything. Since I am not actively trading right now, I like to keep my "skills" up. I'll be back in the game soon to put these ideas to work.
stock makes new low of 96.30. Time to take some profits by unwinding some of the 90/100 here at 3.80 or selling some 80/90 's to put on the fly.