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Home › Forums › Swing Trades › Bull Put Spread in IBB
The index is off 13% in a month, which makes it pretty oversold relative to other pullbacks.
We’re going to fade this move through a bull put spread.
Sell to open Apr 230/220 put spread for 2.20 or better
For thinkorswim users: SELL -5 VERTICAL IBB 100 APR 14 230/220 PUT @2.20 LMT
Now IBB isn’t the best options board. It’s a little thin so don’t use market orders.
A loss of 230 (so around 229.49 to give it some wiggle room) is an appropriate stop.
IBB has breached 230 twice and is stil looking ugly.
Since we are in April spreads, there is not much time left to adjust this trade.
So what we will do here is roll down and out to May:
Buy to close Apr 230/220 bull put spread for 4.10
Sell to open May 225/215 bull put spread for 3.65
I’m still confident the trade will work out as IBB is statistically oversold and the odds are in our favor.
It’s opex, and if you haven’t already you gotta bail on these spreads.
Buy to close IBB May 225/215 bull put spreads for 0.20