On CNBC's "Options Action," Tony Zhang spoke about a bullish options trade for the cannabis sector. It had a pretty volatile week and for investors who are looking for some of that action, Zhang sees ETFMG Alternative Harvest ETF MJ as a way to get exposure.
The implied volatility in the name is very high, so Zhang wants to sell a put spread to make a bullish bet. Specifically, he wants to sell the March $25/21 put spread for a net credit of $1.85. The trade starts to lose money at $23.15, or 5.66% below the closing price on Friday. If the stock drops to $21 or lower, the trade would reach its maximal loss of $2.15.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Comments
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
Click on the image for more info.
Cannabis rescheduling seems to be right around the corner
Want to understand what this means for the future of the industry?
Hear directly for top executives, investors and policymakers at the Benzinga Cannabis Capital Conference, coming to Chicago this Oct. 8-9.
Get your tickets now before prices surge by following this link.