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.
Speaking on Bloomberg Markets, Dan Deming of KKM Financial suggested a risk reversal trade in Utilities SPDR (ETF) (NYSE: XLU).
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.
ENTER TO WIN $500 IN STOCK OR CRYPTO
Enter your email and you'll also get Benzinga's ultimate morning update AND a free $30 gift card and more!
Deming believes there could be a further pull back in the ETF and he wants to protect his long position with a risk reversal trade. He wants sell the October 51 call and buy the October 48 put for a total cost of $0.20. The trade offers protection below $47.80 or 5.22 percent lower from the current stock price. If the stock trades above $51, the profit on the long stock position would be capped at 1.13 percent.
Technically the stock broke below its 50-day moving average and there is a resistance at $51.33, explained Deming. He added that Utilities SPDR (ETF) could drop to its 200-day moving average, at $47, and if the sentiment about interest rate increase changes, it could drop even lower.