(Credit Spread) Glimpse Trade: 12/16/13: AMZN

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 and options trading. If you get a Glimpse of Genius and like what you see, then I suspect that you will sign up for Option Genius membership to get even more trades. We do 3-5 trades a month as part of Option Genius.

DISCLAIMER: Keep in mind that I am not recommending these trade to you. I am just providing these for education and entertainment purposes only. I am not responsible if these trades lose money, because they could.

My advice is to papertrade them and see how they work.

I am also setting up a separate email list for those that want to be notified of any adjustments. Adjustments will not be emailed to our main list or posted on the blog. So if you want to be sure you get all the trades, adjustments, and exits please sign up for that email list by clicking here.

 

3 Comments

  1. Mark on December 16, 2013 at 1:48 pm

    Allen,

    I appreciate your insights.

    Merry Christmas!
    Mark

  2. alain on December 16, 2013 at 3:49 pm

    Thanks. I entered this trade…We will see…

  3. ali on December 16, 2013 at 11:17 pm

    I will only trade covered calls or CSPs. Low priced stocks and high premiums I am interested in.

    Let me know what you have for me. Now I am trading HIMX,AMD,DRYS,OREX just to give you some ideas.

    Thank you for youe services.
    My regards,
    Ali

Leave a Reply Cancel Reply





This site uses Akismet to reduce spam. Learn how your comment data is processed.