The Sell in May and Go Away Trade

Today’s MRKT Call is Presented by Fidelity

Today at 1 pm, Guy Adami and Dan Nathan will go live on YouTube to discuss:

• Sell in May and Go Away Trade

• Take a Shot on Pfizer?

• Trade Management: GOOGL & INTC

• Apple & Amazon Earnings Preview

If you enjoyed this episode, make sure to subscribe to the Risk Reversal YouTube Channel:

SHOW NOTES:

XLK (~$201) Buy June 200 – 180 Put Spread for ~$4

• Buy to open 1 June 200 Put for ~$4.85

• Sell to open 1 June 180 Put at ~85 cents

Break-Even on June Expiration:

• Profits of up to 16 between 196 and 180, max profit below 180

• Losses of up to 4 between 196 and 200 with max loss above 200

Trade Rationale & Management:

• This trade idea risks 2% of the ETF price with a break-even down 2.5% and a max potential gain of 8% if the ETF is down about 10%.

• Like all long premium directional trade ideas, I will look to cut losses down 50% of the initial premium paid and look to take half off if up 100%

Buy May 17th 26 Call for $0.50

• Profits above $26.50

• Losses of up to 50 cents between 26 and 26.50 with max loss below 26

Trade Rationale and Management:

• This trade idea risks 2% of the stock price and breaks even at 3%. If the company has the slightest good news on its guide, the stock could be up 10% in a snap. This is a defined-risk way to be contrarian.

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