4 matching records.
low risk, low reward trade
The speaker suggests selling the July 13 puts at 70 for Coinbase as a trade idea. The trade is based on the assumption that the market is overbought and the potential reward is equal to the potential risk. The trade is considered a balanced play due to the equal risk and reward. The speaker also mentions that the trade is still doable and that the market is expected to move in the expected direction.
The speaker suggests that the short premium side of the market, particularly with stocks like SpaceX, can be a profitable strategy. The ratio spread is recommended as a trade idea, especially when there is an expected move in the stock. The speaker notes that the expected move for SpaceX increased slightly from 37 to 38, indicating a potential for a short premium trade. However, the trade should be executed with caution, as the market's reaction to index inclusion is unpredictable and can vary significantly.
The speaker executed a ratio spread on the S&P 500 (SPX) by shorting 100 calls and longing 200 puts, with an entry at 72. The target was set at 67, with a stop at 72. The strategy was based on the expectation of a price decline, which was supported by the speaker's observation of the market's lower levels. The trade was adjusted by adding to the position, indicating a belief in the continued downward trend.