Buying SHOP put contracts.
Shopify (SHOP) is an expensive tech stock trading at roughly 174 times expected earnings. That makes the stock vulnerable to the rotation OUT of speculative plays and into value stocks that have more reliable profits.
A recent bounce for speculative stocks sets up a good opportunity to make a bearish bet on SHOP. This after the stock plummeted last week breaking all near-term support levels.
The February $1,220 put contracts are in the sweet spot for our in-the-money option approach. If SHOP continues lower as expected, we should get close to a 1-for-1 price movement for the price of our put contracts. And if rebounds from this level, the time premium and volatility for these contracts should help to mute potential risk.
- Buy (to open) 1 SHOP February 18th $1,220 Put
- Limit $110.00 or less
- The new position will represent roughly 10.2% of our Spec Model capital
- 11:50 Executed
- Bot 1 SHOP Feb 18th $1,220 Put @ $108.00