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Todd Gordon's SPDR S&P 500 ETF Trust Options Trade

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On CNBC's Trading Nation, Todd Gordon shared with the audience his analysis of SPDR S&P 500 ETF Trust (NYSE: SPY). He compared the performance of bonds, gold and the S&P 500 and he concluded that the recent rally in bonds and gold is not confirming a continuation of an up trend in SPDR S&P 500 ETF Trust. Gordon explained that gold and bonds are usually struggling when the S&P 500 is pushing higher.

He believes the market is entering an overbought territory and it can't move significantly higher. He also thinks that SPDR S&P 500 ETF Trust is going to face a resistance between $235 and $238, so he wants to place a trade that can make money if the market gains few points. He wants to buy the March 230 call and sell two March 235 calls for a total debit of $1.26. The trade is going to make money if the stock jumps above $231.26 and it can maximally make a profit of $3.74, if SPDR S&P 500 ETF Trust jumps to $235. Above $235, the profit starts to trail off and above $238.74, the trade starts to lose money.

Posted-In: CNBC Todd Gordon Trading NationOptions Markets Media ETFs

 

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