Buying SPOT put contracts.

Spotify Tech (SPOT) developed a popular music streaming app and also broadcasts podcasts and other audio entertainment.

The business is highly competitive with Apple Music likely to create more of a challenge for SPOT in the future. Meanwhile, the stock is trading for more than 160 times expected earnings for this year.

In today’s market, high-multiple tech stocks are being punished. And today’s tech rebound appears to be short lived.

We’ll buy put contracts to bet on a decline for this stock, and a possible break of previous lows near $118. This sets up a good reward-to-risk opportunity as these put contracts will certainly retain plenty of value even if SPOT holds up (because of the volatility in this market right now).

• Buy (to open) 3 SPOT May 20th $165 Puts
• Limit $27.50 or less
• The new position will represent roughly 7.7% of our Spec Model capital
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• 10:53 Executed
• Bot 3 SPOT May 20th $165 Puts @ $27.50