TRADE IDEA: TLT AUG/SEPT 120/27 DOWNWARD PUT DIAGONAL
Short on strength/horizontal resistance ... .
Metrics:
Max Profit on Setup: $208/contract
Max Loss on Setup: $489/contract
Break Even: 122.08 vs. 122.11 spot
Debit Paid to Spread Width Ratio: 489/700 = 69.9%
Notes: This assumes that this level (122) sticks around or is available at NY open. Ideal profit would be ~20% of what you put it on for (.20 x 4.89 = .98/contract). Roll short put out on significant decrease in value (generally 50% max).
Metrics:
Max Profit on Setup: $208/contract
Max Loss on Setup: $489/contract
Break Even: 122.08 vs. 122.11 spot
Debit Paid to Spread Width Ratio: 489/700 = 69.9%
Notes: This assumes that this level (122) sticks around or is available at NY open. Ideal profit would be ~20% of what you put it on for (.20 x 4.89 = .98/contract). Roll short put out on significant decrease in value (generally 50% max).
Note
Alternative trade in TBT: Aug/Sept 37/33 upward call diagonal, 2.60/contract, BE 35.60 vs 35.71 spot, max profit 1.40 on setup, debit paid/spread width ratio: 65%.
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.