This could just be wishful thinking. Because to get FB down to 120 would require actual sellers to show up in the market, something we haven’t seen in 2 months. Yet I want to be prepared if it does actually happen.
The 120-119 level is a key support area, coinciding with a rising 50 day moving average as well as the previous breakout levels. That area is a great spot to sell some spreads.
Here’s the setup I’m looking at:
IWO Premium Order Ticket
Type
Asset
Duration
Strike
C/P
STO
FB
21 Oct 16
110
Put
BTO
FB
21 Oct 16
105
Put
Total Credit:
0.6
I will SCALE IN — adding to the spread at 1.20 and 1.70.