Subscribers appear to be diligently working the Sep 140-135 put spread I’d recommended, so I’ll establish a tracking position of 32 of them for an 0.11 debit. That’s in the middle of the 0.11-0.12 range where I’d said the spread would become an attractive buy. At that price, our theoretical risk will be about $350 — but with a potential payoff of as much as $16,000.
Since the trade thumbs its nose at a bull market that has been going strong for more than four years, we should have no illusions about a big score. In fact, to accept the probability that the trade will be a loser like perhaps 99% of all puts purchased since 2009, you should kiss the $350 good-bye at the outset, then forget about the position. That said, I really like the 45-to-1 odds we’ll be getting on this bet. Click here to learn how you can reduce entry risk by using the ‘camouflage’ trading technique.
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