#SaxoStrats: Playing defence with long ATM Biotech ETF puts
Biotech has been the engine and market leader of the US equity rally with a circa 25% plus year-to-date share rise and an even better 50% plus over the last 12 months.
There could be a correction on the way here though, with markets way too complacent on Greece as well as a possible US Federal Reserve hike decision in September, regardless of those dovish noises this week.
We're specifically looking at the Long Puts 375 ATM Sep 18 here.
Management and risk description
No Fed hike in September or a delay along with a solution to Greece or at least another delayed decision.
Target: 2-3 x premium.
Time horizon: Sep 18, 2015 expiry
It's been a stellar 12 months for Biotech, but is a correction due? Source: Saxo Bank
Biotech share's have enjoyed a fantastic run since mid-2011. Source: Saxo Bank
— Edited by Martin O'Rourke
Non-independent investment research disclaimer applies. Read more