New Trade – put spread

Stock Symbol: [private_monthly]GOOG[/private_monthly]

Strategy: Put Spread

Reasoning: We expect this stock to drop 20 points from it's current price. We could just trade a straight put, but we'd be looking at a 2 for 1 profit ratio. Instead, we're looking to play a put spread, giving us a 3 for 1 profit ratio. This strategy limits our risk by reducing the amount of capital required for the trade and helps to reduce the effect of volatility of the option premiums.

Trade Details:
BTO 1 Sep 480 put option for approximately $10.70
STO 1 Sep 460 put option for approximately $5.50

Net Debit = Approximately $5.20


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