February 20, 2020 - MDT Alert (ZEN)

Today I would like to make a suggestion on a stock that I believe should follow through to the downside.

That stock is Zendesk, Inc. (ZEN).

ZEN is trading around $87.61 as I write this

I am going to suggest an uneven straddle with a bearish bias.

And I am going to suggest you trade the March monthly options.

The suggestion will be an unequal straddle with a bearish bias.

The idea will be buy 2 puts for every 1 call.

Buy to Open (1) March 20th - $87.50 call @ $3.60
The 1 call will cost $360.

Buy to Open (2) March 28th - $87.50 put @ $3.00
The two puts will cost $600.

The total position will cost $960 or about 1% of the nominal portfolio.

The end result if you trade the suggested position size, is that you will own (1) March 20th - $87.50 calls and (2) March 20th - $87.50 puts.

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