New Income Trade in PCLN

[Steven Place]

PCLN has been in a super tight range, and just expanded out of that range, hitting it’s lower 2nd standard deviation bollinger band.

What’s more important here is the very large difference between the current volatility in the stock and what you get with the options market.

So I think a good trade here is to go into some PCLN iron butterflies in small size, with the intent to add and roll along the way.

Here’s the trade I like:

Adjustment points at 1110 and 1210.

 

[Steven Place]

Going to float orders out to close the iron butterfly at 45.50. It’s right at a 20% return on risk and the stock looks ready to see a decent-sized move again.

If we get another big move in PCLN I’ll look to reenter a similar trade.

[Author]

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