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.
On CNBC's "Options Action", Mike Khouw shared with the viewers his options trading strategy in Tesla Inc (NASDAQ:TSLA).
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.
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The company is going to report earnings on Wednesday and Khouw wants to set up a bearish trade. He wants to buy the August 335 put for $14.90 and sell two August 310 puts for $6.20 each. The options structure is going to cost him $2.50 in total and the trade breaks even at $332.50.
Khouw could make a maximal profit of $22.50 with the trade, if the stock drops 7.48 percent to $310. If the stock drops below $310, Khouw is going to have to own it at $310. He would start to lose money below $287.50.