Hey Traders,
This past week we had one of those trades I love — clean, simple, and right on the money.
Let’s break it down.
The Setup
As always, we entered the trade on Tuesday, aiming for a quick 3-day cycle.
This time around, we used Broadcom (AVGO) as our underlying stock.
At the time of entry, AVGO was trading around $243.44, sitting in a nice uptrend after a pullback.
The price action showed signs of stabilization — and that’s exactly what we want to see when setting up a bull put spread.
There are plenty of strong names to choose from lately as markets turn bullish.
But AVGO gave us a wide enough range and solid technicals to build a high-probability setup.
Trade Mechanics (Plain and Simple)
Here’s what we did:
- Sold the $232.50 put
- Bought the $230.00 put
- Collected a net credit of $0.22
That’s a $2.50-wide spread, which means a $0.22 credit, gives us an 8.8% return on risk in just 3 days.
This is what we shoot for: quick, calculated trades with limited risk and fast payout.
The Trip Wire
We also set a trip wire at $234 — a level that would’ve triggered one of three standard exit strategies if the trade moved against us.
But AVGO never came close.
In fact, it moved higher after we got in, peaked, and drifted slightly lower into Friday’s close — but still finished safely above our short strike.
The Outcome
AVGO closed Friday at $248.70, well above our $232.50 put.
That means both legs of our spread expired worthless, and we kept the full premium.
No stress. No adjustments. Just a textbook income trade.
Why This Works
This strategy is designed for exactly these kinds of moments:
✅ Clean setup
✅ Built-in downside cushion
✅ Fast, reliable returns
✅ Rules and structure to manage risk
You don’t need to swing for home runs when the singles keep piling up.
This one was a textbook example of what a smart, disciplined options trader can do — week in and week out.
I’ve got another one lined up for this week — and I’ll share it with you soon.
Trade well,
Jack Carter
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