- This topic has 2 replies, 1 voice, and was last updated 6 years, 8 months ago by .
Viewing 3 posts - 1 through 3 (of 3 total)
Viewing 3 posts - 1 through 3 (of 3 total)
- You must be logged in to reply to this topic.
Become a Great Options Trader
Home › Forums › Closed Trades › Pullback trade in VZ
Setup: Pullback trade
Price: 52.50
Description:
Verizon is selling while the rest of the market is hitting highs.
Why?
VZ has a high dividend, and it feels like a selloff in that “theme.”
If we manage to get an extension to the downside… right around 52.50, I’ll be looking to sell some spreads.
I’m looking at the August 49/46 put spreads, right around .40.
Now it’s possible that VZ trades sideways for a while and then ramps up. If that happens, I’ll change up the setup but 52.50 is my ideal price.
52.50 is coming into play here. This is a “rate-sensitive” play and with the Fed jawboning about a hike in September, the stock has sold off in anticipation of that news.
This is a good place to start selling some spreads. I’m going to be patient with my fills because odds are I’ll be able to get better prices by floating orders out instead of forcing a trade.
IWO Premium Order Ticket | ||||
Type | Asset | Duration | Strike | C/P |
---|---|---|---|---|
STO | VZ | 21 Oct 16 | 49 | Put |
BTO | VZ | 21 Oct 16 | 46 | Put |
Total Credit: | 0.4 |
I will ADD to the trade at 0.55 and 0.80
If you got cash in an IRA, you can also look at selling some puts naked with intent to get assigned.. something like the Oct 50’s.
Using this bounce and the amount of theta to close out this trade.
IWO Premium Order Ticket | ||||
Type | Asset | Duration | Strike | C/P |
---|---|---|---|---|
BTC | VZ | 21 Oct 16 | 49 | Put |
STC | VZ | 21 Oct 16 | 46 | Put |
Total Debit: | 0.16 |