Well as this stock did gap down with good volume supporting the move. I decided to enter short through a Put ratio backspread. Reason being that this options' strategy simply limits my risk in regards to the large gap between 172.50 / 162.50. All in all, I'm looking for further downside to retest the 150.00 / 152.00 area.
For those wondering what a ratio backspread spread is I'll give you a link with a definition of it. Feel free to also just google put ratio backspread if you want to find a better explanation of it.
www.theoptionsguide..../put-backspread.aspx
The position:
The trade:
Cheers, happy trading! =)
For those wondering what a ratio backspread spread is I'll give you a link with a definition of it. Feel free to also just google put ratio backspread if you want to find a better explanation of it.
www.theoptionsguide..../put-backspread.aspx
The position:
- Bought +2 100 AUG 15 157.5 Puts
- Sold/Wrote -1 100 AUG 15 162.5 Puts
The trade:
- Exiting at a loss if we get a daily close above the 200 Moving Average.
- Exiting at a profit if we reach the 150 / 152 area.
Cheers, happy trading! =)