A new beginning today.
The fundamental assumption is that all markets are same as they are all governed by human emotions. Time decay and all other factors affect option buyers in the same manner and their geographical location is not an issue.
So let us embark upon this new journey.
Trade for today :
For initiating a PUT trade, we need a stock which is showing signs of weakness in an otherwise strong market.
One stock which fits the bill is General Motors ( GM ).
I do not go for detailed analysis for identifying strength or weakness. It works for me if the stock has moved down a little bit in 1 month period and has done the same in the 5 day period.
GM meets these two requirements.
We need some time for the trade to work out. So we go for February 21, 2020 Expiry Date for GM PUT 33.
This option could be available for $ 0.58-0.62.
To keep the financial commitment below $ 200 for each trade, we shall buy 3 contracts of this option.
Maximum Risk in the trade is $ 186 plus expenses.
We restrict ourselves to just one trade today.
Let us find out how far we travel with General Motors.
Trade cautiously, trade profitably.
Disclaimer: This post and examples are for teaching purpose only and are not meant as advice/suggestion to trade in these stocks. Trading in Futures and Options can lead to big losses and should be done with appropriate knowledge and advice only. Mentioning the stocks here does not imply that I have a trading position or likely to take a trade in these stocks.