Todd Horwitz's Under Armour Options Trade

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Todd Horwitz of Bubba Trading suggested on Bloomberg Markets a bullish options strategy in Under Armour Inc UAA after the stock dropped more than 25 percent on earnings miss.

He wants to buy the March 22.50 call and he wants to finance it by selling a put spread. Specifically, he wants to sell two February 21 puts and buy two February 19 puts.

The trade is going to make money if Under Armour jumps above $22.50 at the March expiration. If the stock trades above $21 at the February expiration, the put spread is going to expire worthless and he is going to have a long call position. If it trades below $19, Horwitz is going to lose $4 on the put spread, but he's still going to have a chance to recover his losses until March. If the stock trades between $21 and $19 at the February expiration, he's going to have to buy 200 shares of Under Armour at $21.

Date of Trade
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Put/Call
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Sentiment
Posted In: OptionsMarketsMediaBloomberg MarketsTodd Horwitz
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