27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.
After having a consistent uptrend throughout the year, shares of cybersecurity firm Palo Alto Networks Inc (NYSE: PANW) lost almost 10 percent as last week came to a close.
Trading Advantage Senior Market Strategist, Scott Bauer, was on Bloomberg TV to share his option trade on Palo Alto Networks going forward.
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The Reasoning
"Well, if you take a short-term look and when I say short-term, I am looking three months or so, anytime we have seen a pullback of 5 to 8 percent, it's just been a buying opportunity," Bauer began. "An immediate buying opportunity throw out fundamentals, throughout technicals."
He continued, "Well with over the last two days, this sharp pullback here and yes, it did breach the 50-day moving average, which is an important level. But we have really pulled back here. So, I'm going to dip my toes back in the water here because this has been a stock as much as any that has just taken off with the security industry and is one of the fundamentally, probably the soundest stock in the sector there."
The Trade
"So, I want to do is...buying the 177.5, 180 Call spread $7.5 wide Call spread, I am going out to August 28, the weeklies. I can do that for about $2 on a $7.5 spread. The option market -- if you look at what they're pricing in a standard deviation like a humpback here -- if you look at that, it's about $10 to $12. Puts it up at $185, I can get in for $2 on a $7.5 spread, lots of upside," Bauer concluded.
27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.