Hello Investors,
The markets have far exceeded what we expected was possible over the short-term. While that doesn’t guarantee long-term upside, it has to be respected in the short-term. The longer term bear market might be delayed due to stimulus, AI or other factors. While the issues in valuation and other metrics aren’t going away, they also aren’t short-term indicators but play out over long periods of time (years/decades not weeks/months). Today we discussed short selling stocks, primarily used for hedging. However, could be used if a full bear market were to materialize. Finally, we entered into a bearish trade in Kraft KHC.
Buy to open: KHC Aug 15th (monthly) 27.50 strike put (ratio of 1)
Sell to open: KHC Aug 15th (monthly) 25.00 strike put (ratio of 2)
Buy to open: KHC Aug 15th (monthly) 22.50 strike put (ratio of 1)
Debit: 0.70
Max risk = 0.70 or $70.00
Max rew = 1.80 or $180.00
Just a calendar note, we will not be holding a live Trading Mentors next Monday.
Have a great week!