September 3, 2020 - MDT Alert (CRUS)

Mad Day Trader - Trade Alert - September 3, 2020 (CRUS)

It appears that the profit-taking I mentioned is starting to happen.

As a result, I do want to suggest a short term hedge position.

The stock to trade is Cirrus Logic, Inc. (CRUS). As I write this, CRUS is trading just under $60. It is trading at $59.59.

I am going to suggest a one half hedge position on the stock.

Here is the suggestion:

Buy to Open (1) September 18 - $60 Call @ $2.10

Buy to Open (2) September 18 - $60 Puts @ $2.20

Each position will cost $650.

Based on the nominal portfolio, I suggest you limit this trade to a 2 lot, which will cost $1,300 or 1.3% of the tracking portfolio.

This will result you buying 2 of the $60 calls and 4 of the 60 puts.

The trade uses short term options, so I am looking for a follow through on the move.

Legal Disclaimer

There is a very high degree of risk involved in trading. Past results are not indicative of future returns. MadHedgeFundTrader.com and all individuals affiliated with this site assume no responsibilities for your trading and investment results. The indicators, strategies, columns, articles and all other features are for educational purposes only and should not be construed as investment advice. Information for futures trading observations are obtained from sources believed to be reliable, but we do not warrant its completeness or accuracy, or warrant any results from the use of the information. Your use of the trading observations is entirely at your own risk and it is your sole responsibility to evaluate the accuracy, completeness and usefulness of the information. You must assess the risk of any trade with your broker and make your own independent decisions regarding any securities mentioned herein. Affiliates of MadHedgeFundTrader.com may have a position or effect transactions in the securities described herein (or options thereon) and/or otherwise employ trading strategies that may be consistent or inconsistent with the provided strategies.