Question to options traders

How would you trade this setup?

I think market is going bearish for the next few weeks. Shall i buy puts or sell calls itm, otm, atm? And what expiry date would you trade? Can you close the position if the target hits before the expiry?

I think, selling is risky as your loss can be unlimited. I don't have experience in options trading but i want to limit my risk. Let's say I have $10K in my account and would like to risk only $200 which is 2% of my balance. Also I would like to go long at the magenta support and add more at the bottom ascending support lines.

We don't know if it is going to hit or when it's going to hit. I'm a bit confused here

How would you trade this?

 

Do both and as long as you can handle the short calls then you have a free trade.

 

What do you mean by "do both" and "free trade" ?

 

Sell calls buy puts for no cost. It is called a risk reversal. Google it.

 

But when i do this doesn't it mean i'm shorting the asset? Both of them are same?

 

This is pretty basic stuff. You would likely learn alot by watching a youtube video or reading an article on the subject.

 

Risk profile graph is the same as being short. Change the risk profile by buying a call at a higher strike price and selling call at lower strike price. Google credit spread.

 

If you feel bearish, but don't expect a serious market collapse, then options are not a good vehicle. Time will erode your premium.

Your better bet is simply to short the S&P via one of a variety of instruments, including leveraged ETFs or futures.

 

I have just shorted but I wanted to understand the logic of options traders. That's why I'm asking how can you trade this setup...

 

%% Something like SQQQ;
not as much decay/ice melting summer time.Pays a dividend believe it or not.NOT a predicition, not suitable for all investors.