AMZN: Credit Spread
This is a simple credit spread using PUTS on Amazon.com.
By using Puts that means the trade is bullish to neutral. What I want is for the stock to stay above the short strike. As long as it does that the trade will make money.
If you look at a chart of Amazon you will see that it is trading right now at 387 and my short strike is at 355 which is 32 points away or about 8%. Will AMZN drop 8% in 32 days? Probably not.
Sell to Open Jan 355 Puts
Buy to Open Jan 350 Puts for a credit of .60
That means a potential profit of $60 per spread. Max risk/loss is $440 per spread and so the Potential ROI is 13.6%
What is Glimpse of Genius?
Simple. I want to expose more people to option selling. If you get a Glimpse [...]