Trade Alert: Top Names

A Different Approach

Top Names Volatility

One of last night’s top ten names is up about 20% today, after reporting an earnings beat and very bullish guidance after the close yesterday (our top names calculations were based on data as of yesterdays close, so they didn’t factor in this earnings beat).

In this market, I don’t want to buy stock that just shot up 20%—if we get another day like Monday, this stock could give all those gains back in a day.

So what I just did is sell puts on this name. If it keeps going up over the next 6 weeks or so, the puts will expire worthless, and I will have made >8% on the money I risked over that time.

And if we get another leg down in the market, and this stock slides with it, I will have gotten paid to buy a stock I like at a lower price.

Details below.