Hello Traders,
Today we are going to enter into a bearish market call. Specifically we are going to “sell to open” the SPY May 22nd (weekly) 293.00 strike calls for +4.60 credit. This trade has a lot of risk if the markets push sharply higher. So, we will place a stop loss on the trade to reduce loss potential. This trade is ideal for those with a large basket of stock portfolio. That is because this is a “naked” position but covered by the other stocks owned! The stop loss is as follows: “buy to close” the SPY May 22nd (weekly) 293.00 strike calls for 5.90 debit. If we are wrong then the loss potential is 1.30 or $130.00 per contract traded.
We got filled on the EEM June 19th – 40.00 strike covered calls today.
Have a nice week!