Market Sells Off: What’s the New Risk On Trade?

Today’s MRKT Call is Presented by Fidelity

Today at 1 pm, Guy Adami and Dan Nathan will go live on YouTube to discuss:

• The New Risk-On?

• Guy’s Gold Catch-Up Trade Idea

• Fade Financials into Earnings?

• Carter Charts Alphabet

If you enjoyed this episode, make sure to subscribe to the Risk Reversal YouTube Channel:

SHOW NOTES:

Buy June 24/26 Call Spread for ~$0.55

• Buy to open 1 June 24 call at ~$1.10

• Sell to open 1 June 26 call at ~$0.55

Break-Even on June Expiration

• Profits of up to $1.45 between $24.55 and $26 with max gain above $26

• Losses of up to $0.55 between $24 and $24.55 with max loss below $24

Trade Rationale & Management

• This trade idea risks 2.3% of the ETF price, has a break-even up of less than 4%, and has a max potential payout of nearly 3 to 1 if the ETF is up 10% in two and half months

Buy Apr 19th 41.50 put for $0.43

Break-Even on Apr 19th Expiration

• Profits below $41.07

• Loses of up to $0.43 between $41.07 and $41.50 with max loss above

Trade Management & Rationale

• This trade idea risks 1% of the ETF price, has a break-even down of 1.5%, and catches big bank earnings

Trade Update:

• With GOOGL ~$153 the May 150/170 call spread that cost ~$5 on March 19th when the stock was ~$146.50 is now worth about $7.30

• It makes sense to rolls this trade up and out to catch AAPL’s WWDC on June 10th

Action: Sell to close GOOGL May 150/170 call Spread at ~$7.30

New Trade: Buy to open GOOGL June 155/175 call spread for ~$6

• Buy to open 1 June 155 call for ~$8.50

• Sell to open 1 June 175 call at ~$2.50

Break-even on June expiration:

• Profits above $161, a max gain of $14 above $175

• Losses of up to $6 between $155 and $161 with max loss below $155

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