Here at YouCanTrade, we have been keeping watchful eye on defensive stock Raytheon
RTX
, which has been trading below its 8 day EMA over the past 2 weeks of trading. The last two days of positive market activity has helped Raytheon pullback to its 21-day moving average, which could be a signal for taking a position in the direction of the downward trend. However, the option volume tells a slightly different story. The current call volume for RTX is 14,500 calls, largely outweighing the 5000 puts traded today. That is nearly 3 times as much volume on RTX calls than puts.
So, I am going to watch this trade idea and put it to the test.
As of 12 pm ET on May 19th, the RTX 59 strike puts expiring June 19th, 2020 are trading at a mid-price of $2.50. I am simply going to monitor the price change on this put option over the next few days to see who got it right. The bulls? or the bears?
RTX
, which has been trading below its 8 day EMA over the past 2 weeks of trading. The last two days of positive market activity has helped Raytheon pullback to its 21-day moving average, which could be a signal for taking a position in the direction of the downward trend. However, the option volume tells a slightly different story. The current call volume for RTX is 14,500 calls, largely outweighing the 5000 puts traded today. That is nearly 3 times as much volume on RTX calls than puts. So, I am going to watch this trade idea and put it to the test.
As of 12 pm ET on May 19th, the RTX 59 strike puts expiring June 19th, 2020 are trading at a mid-price of $2.50. I am simply going to monitor the price change on this put option over the next few days to see who got it right. The bulls? or the bears?
Comment:
As of 4:00 pm ET on May 19th, the RTX 59 strike puts expiring June 19th, 2020 are trading at a mid-price of $3.25. Up $75 since the post was written.
Comment:
24 hour update: 12:00pm ET May 20th, the RTX 59 strike puts expiring June 19th, 2020 are trading at a mid-price of $2.91. Up $41 since the post was written.
Comment:
Ouch! Definitely not a pullback trade. RTX reversed to the upside just days after the post was written, though, there were some short term bearish opportunities to be had.