Market Overview

Mike Khouw And Carter Worth Suggest A Bearish Set Up For iShares Dow Jones Transport. Avg. ETF

Share:

Speaking on CNBC's Options Action Carter Worth explained the reasons why the rally in iShares Dow Jones Transport. Avg. (ETF) (NYSE: IYT) should not continue.

He compared the performance of transport stocks with the performance of the S&P 500 since 1980 and concluded that recently the transport stocks doubled the performance of the S&P 500, although they performed in line historically. Worth believes that traders should take profits because there is a correction ahead.

Mike Khouw suggested a bearish options strategy to capture the decline. He wants to buy a put spread in iShares Dow Jones Transport. Avg. (ETF). Specifically, he wants to buy the January 157.50 put for $4.00 and sell the January 150 put for $1.50. He would pay $2.50 for this trade and his maximal gain is $5.

 

Related Articles (IYT)

View Comments and Join the Discussion!

Posted-In: Carter Worth CNBC Mike Khouw Options ActionMedia Trading Ideas