Going against the herd is never easy, especially when money is on the line, but that’s exactly what our traders did last Friday.
First up was a bearish trade on Nike as the apparel giant touched all-time highs. According to Oppenheimer’s Carter Worth, the stock’s rally looks a little long in the tooth, and he made the case for hitting the pause button. To profit from that pullback, Options Action’s Mike Khouwsuggested buying the April 100/90 Put Spread for a $1.35.
Trade and breakdown are below.
MIKE’S NIKE OPTIONS TRADE
- BUYING THE APRIL 100-STRIKE PUT FOR $2.25
- SELLING THE APRIL 90-STRIKE PUT FOR $0.90
HOW MIKE’S NIKE TRADE MAKES MONEY
- LOSSES ABOVE $98.65
- PROFITS BETWEEN $98.65 - $90.00
- PROFITS CAPPED AT $90.00
Our other trade involved a much more complicated structure on a much more complicated name: Apple . Dan Nathanof Riskreversal.com correctly stated that the stock would his $500. But he’s fading the move. As a bearish trade, he bought the March 480/460/440 put fly for $3.00. His trade and breakdown are below.
DAN’S APPLE OPTIONS TRADE
- BUY 1 MARCH 480-STRIKE PUT FOR $11.50
- SELL 2 MARCH 460-STRIKE PUTS FOR TOTAL OF $10.80
- BUY 1 MARCH 440-STRIKE PUT FOR $2.30
HOW DAN'S TRADE MAKES MONEY
- LOSSES ABOVE $477
- PROFITS BETWEEN $477 - $443
- GET LONG AT $460
- LOSSES BETWEEN $443 - $400
- LOSSES CAPPED AT $400
Watch Options Actionon CNBC Fridays 5:00pm ET, Saturdays at 6a ET and on Sundays at 6a ET
Questions, comments send them to us at: firstname.lastname@example.org