Trade Alert: Red Friday
A bearish trade on a security that may have further to fall.
Hopefully, You Hedged Or Raised Cash
In a post at the beginning of this week, I suggested doing so.
Are We Heading Into A Bear Market?
ChatGPT4o put “Bock Market” into this image. When I asked it to remove that, it added “REMOVE” to the image. Still working out the kinks at Open AI, apparently.
Hopefully you did, so you have cash to enter today’s trade.
If you placed the trades in the post below, you’d have a bit more cash.
Same if you placed the trades in this post from Wednesday,
For today’s trade, my initial idea was to place a bullish bet on an inverse ETF that hit our top ten names last night.
But that one has run too far today. Maybe we’ll place that trade on a pullback next week. There is another ETF that has been doing well this year, on inflation fears.
Today’s crash in stocks and oil suggests those fears may no longer be founded. Our trade today is a bet on this ETF falling in the near future. Our maximum upside is uncapped, but could be a few hundred percent, and our maximum downside is 100%.
Details below.
Today’s Bearish Trade
The security is the SPDR Gold Shares ETF (GLD 0.00%↑), and our trade is buying the $273 strike puts on it expiring on April 17th, for $2.24. The max loss on 2 contracts is $448, and the break even is with GLD at $270.76. This trade filled at $2.20.
Exiting This Trade
I am going to open a GTC order to exit one of the puts for $6, and aim to exit both before expiration.