LD Lossdog Research
symbol

AVGO

3 matching records.

Trade idea

AVGO Put Ratio Spread

The speaker proposes a put ratio spread on AVGO, buying the AUG 330 put and selling two AUG 220 puts for a $5.30 credit. The break-even is at $215, and the trade is considered due to the wide $10 spread between the puts. The speaker prefers this spread over a narrower one, as it provides more room for the stock to move and potentially higher returns. The trade is considered a good opportunity due to the high IVR and the stock's recent price movement.

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StrategyPut Ratio Spread
AssetEquity
ExpirationAugust
Time horizon40-50 days
Entry / triggerStock price above $223
Target / exitCredit of $5.30
Invalidation / stopBreak-even at $215
SpeakerSpeaker
Structure / legs
  • Buy AUG 330 put
  • Sell two AUG 220 puts
Risks
  • The stock could move against the trade
  • The trade may not be filled at the desired price
  • The spread could be wider than expected
  • The credit received may not be sufficient to cover potential losses
Put Ratio Spreadequityput ratio spreadAVGO
high confidenceVerify in video at 37:13 ↗
Q&A

What's the best management strategy for a putback ratio?

A putback ratio strategy with AVGO can be used to manage risk and potential profit. The speaker suggests buying the 310 put if the trade is no longer desired, creating a free butterfly with potential profit.

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Actionable takeawayBuy the 310 put to create a free butterfly with potential profit.
AVGOOptionsrisk management
high confidenceVerify in video at 1:17:29 ↗
Q&A

Why not just sell the 215 put instead of the 220 put?

The speaker explains that while selling the 215 put could yield a slightly higher credit, the 220 put is preferred due to the embedded $10 wide spread, which provides more room for the stock to move and potentially higher returns.

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Actionable takeawayA wider spread in a put ratio spread can provide more flexibility and potentially higher returns if the stock moves in the desired direction.
put ratio spreadAVGOtrading strategy
high confidenceVerify in video at 37:45 ↗