Trade Alert: Buying The Drop

Four bullish options trades taking advantage of today's drop.

Buying The Drop

For some of the names we’re looking at, “drop” seems more accurate than “dip”.

We’ve got four bullish trades today. Trades #1 and #2 are short term, speculative ones, using an approach that’s been successful for us recently: buying Portfolio Armor top names after a market drop. For these, we’re using options expiring at the end of next week. If this week’s correction turns out to be a longer term one, these two trades probably won’t work, but that’s the risk we’re taking with them.

For the second two trades, we’re using an approach similar to the one we used yesterday: both of these names are oversold (Relative Strength Index < 30) and undervalued (Chartmill Valuation Rating of 8 out of 10). For these two trades, we’re using options expiring after their next earnings reports.

Details below.

If Your More Risk Averse

If you would rather add some downside protection here, you can download the Portfolio Armor optimal hedging app by aiming your iPhone camera at the QR code below (or by tapping here, if you're reading this on your phone).

Today’s Trade #1