Trade view /
17 January 2017 at 15:10 GMT
114 or below
The stochastic, RSI, and MACD indicators are giving us bearish signals on Apple.
Let's buy the Feb17 (expiry February 10) 119/114 Put Spread to play a retracement to 114.09 (50% of retracement of the last bullish wave 108.25/119.93).
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Source: Saxo Bank
Management and risk description
Buy Feb17 (expiry 10th February) 119/114 Put Spread at $1.79
=> Buy Feb17 119 Put at $3.02
& Sell Feb17 114 Put at $1.23
Maximum profit at expiry is limited
Maximum profit at expiry achieved when underlying price =< Short Strike Price
At expiry maximum profit = Long Strike Price minus Short Strike Price minus Premium Paid
= $119 - $114 - $1.79
Return on Investment if the market closes at $114 or below at expiry
=Profit/Premium X 100
=$3.21/$1.79 X 100
Maximum loss is limited to premium paid
Maximum loss is $1.79 or $179 per Put Spread.
Break-even Point at expiry
= Long Strike - Premium Paid
= $119 - $1.79
Target: $114 or below.
Time horizon: 24 days.
— Edited by Michael McKenna
For more on contract options click here
Non-independent investment research disclaimer applies. Read more