Trade Alert: Crypto

With Ethereum flying, a bet on a picks & shovels play on it.

A Picks & Shovels Play On Ethereum

The crypto currency is flying on expectations that ETFs for it will be approved by the SEC soon. Our second options trade today is on a company that will make money from both trading in the ETF and the cryptocurrency itself.

If we’re right, the potential upside here is about 280% over the next few months. If we’re wrong, a loss of no more than 100%.

Details below.

The company is Robinhood Markets (HOOD -3.71%↓), and the trade is a vertical spread expiring on August 16th, buying the $23 strike calls and selling the $24 strike calls for a net debit of $0.26. The max gain on 12 contracts is $888, the max loss is $312, and the break even is with HOOD at $23.26. This trade hasn’t filled yet. This trade filled at $0.26 on 5/22/2024.

Exiting This Trade

Assuming this fills, I plan on setting a GTC order to exit at a net credit of $0.90 to $0.95, and lower that price as necessary as we approach expiration.