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Proactive Spreads, November 1st, 2021 – PYPL, ARCH, SPG

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Markets are still running hot, with TSLA being the workhorse for large cap tech.

On top of that, you’ve got IWM (smallcaps) with a potential breakout, MDY (midcaps) already breaking out, and a ton of risk/meme names running. The party is back on, and it will probably be that way for a bit.

There are some pockets that afford us good risk/reward where they haven’t participated in the rally due to single stock risk, or perhaps a sector that could fall out of favor for a bit. That’s where we will focus today.

Trade #1: PYPL

PYPL, along with other payment processors like V/MA, has not had a good October. It’s selling off right into a major level of support, which I think is a good place to start a position.

Keep in mind– PYPL has earnings so you may want to size down a bit to avoid gap risk. I think it will be OK as much of the bad news is priced in, but earnings are earnings so that’s the risk you’ll need to make.

Trade Setup

Expected Price: 226.88

Sell to Open PYPL 17Dec21 200/195 Put Spread

Tier 1: Enter at 0.75, Exit at 0.02

Tier 2: Enter at 1.05, Exit at 0.26

Tier 3: Enter at 1.35, Exit at 0.32

Stop Out If Close Under 199.89

Trade #2: ARCH

A slightly different chart today in ARCH. This is a coal name that’s had a great move higher, but it’s starting to top out a bit and could be due for a stop run with the weak hands bailing.If we manage to get a flush into the low 80s I want to be involved.

Trade Setup

Expected Price: 81.78

Sell to Open ARCH 17Dec21 70/65 Put Spread

Tier 1: Enter at 0.78, Exit at 0.06

Tier 2: Enter at 1.092, Exit at 0.3

Tier 3: Enter at 1.404, Exit at 0.39

Stop Out If Close Under 69.89

Trade #3: SPG

This is a bit of a “wish” kind of price, but Simon has been in a steady breakout. If we get a pullback then I’ll play it as it comes into retest the prior breakout level.

Trade Setup

Expected Price: 140

Sell to Open SPG 17Dec21 130/125 Put Spread

Tier 1: Enter at 0.56, Exit at 0.2

Tier 2: Enter at 0.784, Exit at -0.06

Tier 3: Enter at 1.008, Exit at -0.11

Stop Out If Close Under 129.89

Disclaimer

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