I am looking to take a shot at the downside of the stock market via a put spread. I think traders would very much like to see 15,000 print in the DOW (1600 in SP) and then their attention will move elsewhere. There is no question we have been on a unbelievable run here as of late. But in my opinion, we are due for a correction. I am willing to step in here while we are trading at 1590-ish. We will need to get a bit closer to 1600 to get the price I am looking for. Not a bad idea if you are looking to protect recent gains in your stock portfolio during the next 72 days.
June mini-SP 1580 / 1540 put spread:
Buying the June 1580 put
Selling the June 1540 put
Premium of 10 points to the BUY side (GTC)
Risk will be the cost of the spread …($500.00 plus trading costs)
OBJ will be a close below 1540.00 on expiration on June 21st … $2,000.00 (minus trading costs)
Have a look:
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