Todd Horwitz's SPDR S&P 500 ETF Trust Trade

Loading...
Loading...

Todd Horwitz of Bubba Trading suggested on Bloomberg Markets that investors should consider an options trading strategy in SPDR S&P 500 ETF Trust SPY.

He thinks the SPDR S&P 500 ETF Trust could trade lower, because it's trading at its highs and volatility is very low. He wants to make a trade that can make him money if the market stays high, but also if it trades lower. To set up such a position, he has to use options.

Horwitz wants to sell 5 contracts of the September 16, 218 strike puts and buy 6 contracts of the September 16, 217 strike puts for a credit of $0.70. If the SPDR S&P 500 ETF Trust stays above $218, he is going to collect $0.70 and if it trades lower he is going to be net short the market, with a potential unlimited reward. The only way he can lose money is if SPDR S&P 500 ETF Trust stays between $212.70 and $217.86.

Posted In: OptionsMarketsMediaBloomberg MarketsBubba TradingTodd Horwitz
We simplify the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!

Loading...