OPTION TRADE OF THE DAY!
E Mini S&P- In the past we have witnessed the stock market start to stumble and then fall as we go from August into the fall, which DOESN’T mean it will happen again, but it could. Add in the fact that the market is in the 8th year of a bull run and we like it even more.
#1 Bear Put Spread
Buy the December Emini 2300 put
Sell the December Emini 2200 put
Cost and Risk $500 plus commission and fees
Profit Profile with the market at or below 2200 on expiration the trade would gross $5,000 minus costs (premium +commission and fees)
#2 Bear Put Spread with a Naked Leg
Buy The December Emini 2300 put
Sell The December Emini 2200 put
Sell the December Emini 2600 Call NAKED LEG
Cost is $25 plus commission and fees
RISK UNLIMITED ABOVE 2600
Margin Requirement $2500
Profit Potential with the market at or below 2200 the trade would gross $5000 before commission and premium cost
Please remember that spread trades are charged commission and fees per leg, per contract
This information is not to be construed as an offer to sell or a solicitation or an offer to buy the commodities and/ or financial products herein named. The factual information of this report has been obtained from sources believed to be reliable, but is not necessarily exhaustive and is not guaranteed to be accurate. Any market or other opinions expressed herein are those of the author only as of the date indicated and not necessarily those of Reliance Capital Markets II, LLC. For customers trading options, the charts included in this report are presented for informational purposes only. They are intended to show how investing in options can depend on the underlying cash and/ or futures prices; specifically whether or not an option purchaser is buying an in-the-money, at-the-money, or out-of-the-money option. Furthermore, the purchaser will be able to determine whether or not to exercise his right on an option depending on how the options strike price compares to the underlying cash and futures price. Selling options subjects the investor to margin calls and virtually unlimited risk.
The charts are not intended to imply that option prices move in tandem with cash and futures prices. In fact, option prices may only move a fraction of the price move in the underlying assets and/ or futures. In some cases, the option may not move at all or even move in the opposite direction of the underlying asset and/ or futures contract. Past performance is not indicative of future results.