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

On CNBC's Trading Nation, Todd Gordon shared with the audience his analysis of SPDR S&P 500 ETF Trust 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.

Market News and Data brought to you by Benzinga APIs
Comments
Loading...
Posted In: CNBCOptionsMarketsMediaETFsTodd GordonTrading Nation
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!