TheOptionPlayer.com sets up an Biotechnology Index ETF (NasdaqGM: IBB) short-term (43-day) option strategy (Based on Thursday’s closing quoted bid/ask prices). Login in with a Premium Subscription to view data/images
Why we recommend it:
The difference between funds paid out and received is a $1.90 per share debit maximum risk for this trade. The maximum profit is approximately $2.10 per share (approx. 110%) if the ETF moves higher prior to the option contract expiration date. See Guidelines page at www.theoptionplayer.com/ for explanation on how trade is set up.
• As evidenced in the Biotechnology Index ETF (NasdaqGM: IBB) chart below, the major stock indices are in the middle of a recovery bounce after last week’s apparent “bull trap” sell off.
• Over the past few years “buying dips” has probably been the most profitable trading strategy.
• We are betting the Biotech Index follows through on the recovery bounce because historically March is one of the more profitable months for stocks.
• The published trade selected strike prices to minimize the amount of funds at risk.
52-Week High: $119.30
52-Week Low: $94.20