SBN Options Idea for February 2023
The major indices are all trading deep in the red following a volatile and active morning session in stocks with the continued rally in Treasury yields causing turmoil on Wall Street. The Core PCE Price Index, the Fed’s favorite inflation measure, came in at 0.6% well above the consensus estimate of 0.4%, giving an early boost to rates while putting severe pressure on tech stocks and other rate-sensitive issues. The Dow, the Nasdaq, and the S&P 500 all dropped to fresh pullback lows, erasing yesterday’s late-day rally, with the benchmarks all violating key technical levels as well.
Suggested Option Trade:
Sell Puts on Shopify Write(Sell) $35 Puts on SHOP expiring April 21' 2023 at $1.60 Credit
Trade: Sell ("sell to open") the April 21' 2023 $35 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 $1.60 or so.
Current Stock Price: $40
If SHOP trades over $35 at expiration, we will keep the entire credit at a 100% profit. If it trades below $35 at expiration, we happily own the shares at a net price of $33.4 ($35 - $1.60).
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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