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SBN Options Idea for August 2021

Market Summary:

The major indices are all trading lower at midday, erasing yesterday's afternoon rally, with small-caps leading the way lower yet again. The Russell 2000 hit its lowest level in nearly a month this morning, with the Dow and the S&P 500 pulling back from their all-time highs as well. Dow members Home Depot (HD) and Walmart (WMT) both reported bullish earnings in pre-market trading, but HD’s same-store sales missed expectations for the first time in nearly two years, putting pressure on the whole consumer discretionary sector.

Suggested Option Trade:

Sell Puts on Yum! Brands, Inc. Write(Sell) $130 Puts on YUM expiring October 15' 21 at $2.85 Credit

  • Trade: Sell ("sell to open") the October 15 2021 $130 put.

  • Allocation: Size the position according to your portfolio size and how much you're comfortable investing.

  • Price Guidance: Aim to receive a net credit of $2.85 or so.

  • Current Stock Price: $134.10

If YUM trades over $130 at expiration, we will keep the entire credit at a 100% profit. If it trades below $130 at expiration, we happily own the shares at a net price of $127.15 ($130 - $2.85).

You will need to manage the trade till expiration or closure yourself, and no further guidance will be issued. If you need any help, you may reach out to us. Disclaimer: Options trading involves substantial risk. The valuation of stock and options may fluctuate, and as a result, in some cases, members could lose more than their original investment. In no event should the content of this correspondence be construed as an express or an implied promise, guarantee or implication by StockBuzzNow that you will profit or that losses can or will be limited in any manner whatsoever. Past results are no indication of future performance. No guarantee of any kind is implied or possible where projections of future conditions are attempted.

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