Since long stock opportunities have been pretty scarce, I've traded a few Bear Call spreads to keep myself engaged. A quick refresher, a Bear Call spread is a risk defined option trade where you collect a credit on a bearish bet. I typically sell the .30 delta and define my risk buy buying an option further out of the money, typically 2 strikes away. At .30 delta, your sold option has a 70% chance expiring worthless, but roughly a 60% chance of being "touched" at some point before expiration. So, you can't get too nervous if your short strike gets breached at some point. I typically hold these spreads until 1 of 2 things occurs.
1.) I reach 50% of max profit
2.) The short option expires in 5-7 days.
Earlier This Week I took a Bear Call trade on $CAT. The Chaikin platform signaled an "Overbought Sell" last Tuesday.
I'll keep you posted on the outcome.
I continue to look for long stock opportunities, but as they say, you only have what the market gives you.
Please leave any comments below, I'd love to hear from you!