WES - neutral to bullish strategy : Bull Put Spread ( options)

2020年6月15日

The Consumer discretionary sector is correcting in a Bull leg - it has done 'normal' correction so far in length and time;
SO looking at a stronger leading stock in the sector - we have a similar action.

As this places a slightly higher probability of the stock at least holding 'above' support zones below - a neutral to bullish options credit spread can take advantage of slightly higher options implied volatility for the past 30 day ( 33% vs 27%) ;
and with only 14 days left on June 25th expiry can get the 'time-decay' before it closes below credit leg strike of 40.75.

Bull Put spread June expiry : -15 shares @ 40.75 strike ( european) = -0.74
+15 @ 40.06 = +0.53 diff = + $ 464 premium paid
no stops required as if stock expires 'in the money below 40.74, I will buy the stock after being exercised and hold for a recovery of any losses on the table whilst doing a covered call strategy for extra income & hold for dividend payment in 2 months time.....

The entry strategy : Firstly, the consumer discretionary sector is down three bear bars without too much overlap,
and it has equaled the largest correction recently of about -9.5%. As its a fairly strong uptrend, I anticiapte it won't drop to much further or if so, it will recover fairly quickly to AT LEAST present levels for the next two weeks.... ( neutral)
This is because this sector is defensive in nature, and coming to end of June Quarter should see ' window dressing' by FUNDs on the conservative side.
Stock analysis : WES has a similar corrective degree though only -7.5%, and is the 'Leader' in terms of strength in this sector.
The entry signal is based loosely on 'The ANTY' which takes advantage of catching brief corrections in a larger trend.
The modified Stochastic indicator shows its cycled down to corrective part of cycle creating a disparity in price to averages.
I only haven't waited for 'confirmation of next day recovery because I wish to use an options - spread as ' protection rather than a stoploss, and I want to enter on a down- day to get the most oomph in the put premium I can sqeeze out given only 14 days left for time-decay to do the rest of the errosion in premium ( and thus my profit being a credit spread).

2020年6月23日

交易开始

With only 3 days until expiry this trade looks safe....likely to keep in the bank premium paid to me for credit spread....