OPENING: XLK AUG/SEP 72/76 BEAR PUT DIAGONAL
BOT +1 DIAGONAL XLK 100 21 SEP 18/17 AUG 18 76/72 PUT @2.75
Paid 2.75 (debt is 69% of the width )
Breakeven @ expiry $73.58
-39 delta, .96 theta
Max Loss : $275
Max Profit : $126
Notes:
Opened a bearish trade here fade the recent rally and add some negative deltas to balance the portfolio.
Following another great trade idea from NaughtyPines! (link below)
Rationale:
Any number of reasons a summer 'tech-wreck' could evolve: trade war, AAPL cutting mobile parts orders from suppliers, weakening Chinese economy etc ...
The top holdings are; AAPL, MSFT, FB, GOOG, V, INTC, T, VZ, CSCO (not sure how V is a 'tech' name?)
Some fundamentals on XLK : The forward PE is near 19, and P/B ratio over 5. There's almost no yield, so it's all about the estimated earnings growth , which if revised down should get punished.
Based on a _DCF valuation model: XLK fair value around 75 by year end... based on 2019 earnings estimates and assuming 13.6% earnings growth .
For the same deltas you could short 40 shares of XLK and borrow $2850 worth of stock, but would be charged the overnight borrowing rates as well.
Paid 2.75 (debt is 69% of the width )
Breakeven @ expiry $73.58
-39 delta, .96 theta
Max Loss : $275
Max Profit : $126
Notes:
Opened a bearish trade here fade the recent rally and add some negative deltas to balance the portfolio.
Following another great trade idea from NaughtyPines! (link below)
Rationale:
Any number of reasons a summer 'tech-wreck' could evolve: trade war, AAPL cutting mobile parts orders from suppliers, weakening Chinese economy etc ...
The top holdings are; AAPL, MSFT, FB, GOOG, V, INTC, T, VZ, CSCO (not sure how V is a 'tech' name?)
Some fundamentals on XLK : The forward PE is near 19, and P/B ratio over 5. There's almost no yield, so it's all about the estimated earnings growth , which if revised down should get punished.
Based on a _DCF valuation model: XLK fair value around 75 by year end... based on 2019 earnings estimates and assuming 13.6% earnings growth .
For the same deltas you could short 40 shares of XLK and borrow $2850 worth of stock, but would be charged the overnight borrowing rates as well.
Trade closed: target reached:
Closed for win today as FANGs continue to slide....
Paid 2.75 initial debt. 25% profit target was 3.43
SOLD -1 DIAGONAL XLK 100 21 SEP 18/17 AUG 18 76/72 PUT @3.50
Paid 2.75 initial debt. 25% profit target was 3.43
SOLD -1 DIAGONAL XLK 100 21 SEP 18/17 AUG 18 76/72 PUT @3.50