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SBN Options Idea for June 2021

Market Summary:

The major indices are all trading modestly higher at midday as stocks held on and even added to their healthy Monday gains this morning following a quiet overnight session across financial markets. Trading activity and volatility have been muted in early trading as traders took a step back ahead of this afternoon's highly-anticipated testimony by Fed Chair Jerome Powell, with the Volatility Index (VIX, - 6.5%) dropping sharply for the second straight day, and hitting a one-week low. Investors expect calming words from the Chairman concerning the Central Bank's hawkish shift in the wake of last week's turmoil in the Treasury market which was accompanied by a volatile pullback in stocks.

Suggested Option Trade:

Call (Bull) Debit Spread on Amazon Establish Bull Call Spread on AMZN expiring August 20' 21 at $49.50 Net Debit

  • Trade:

Buy 1- August 2021, $3450 strike call for $186.90


Sell 1- August 2021, $3550 strike call for $137.40

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

  • Price Guidance: Net debit of $49.50 or so.

  • Current Stock Price: $3,490

If AMZN trades over $3550 at expiration, we will make a 100% profit. If it trades below $3450 at expiration, we will incur a 100% loss. If it trades between the 2 strike prices, we will make a partial profit or loss. Be sure to close the trade before or closer to expiration!

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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