With the DIA at fairly long-term overhead resistance, I thought I'd set out how I'd potentially take a bearish assumption directional shot using a defined risk options setup where the max loss is known from the outset. There are several ways to go about this:
1. Short Call Vertical
Buy the September 15th 351 call and sell the September 15th 346 call, resulting...
Pictured here is a July 16th 416/432 Put Ratio with twice the number of contracts on the long side as on the short which I can either do as a standalone directional shot or (in this particular case) a hedge against a portfolio that is longer than the net delta of this particular setup.
Here's how it's constructed:
Start out by (a) looking to buy 2 x (or some...
