Hey Traders,
If you’ve been following markets these last couple of weeks, you know it’s been anything but easy for traders. Just take a look at some of the headlines:
Which is why I wanted to recap the trade my followers and I just closed out this week.
Because even in a market that has been less than cooperative — and with a stock that didn’t exactly move the way we expected it to, we still ended up logging a winning trade in just three days.
We started the week by setting up a trade on Broadcom, stock ticker AVGO.
The setup was straightforward:
- sell the $215 put
- buy the $212.50 put
- targeting a net credit of $0.12 or more.
With a $2.50 spread width, this setup offered a potential yield of 4.8% in just three days!
Why This Trade Made Sense
When we placed this trade on Tuesday, AVGO was trading around $230.
That gave us a nice cushion between the stock’s price and the $215 strike price of our short put.
The goal was simple: for the options to expire worthless at Friday’s close, as long as AVGO stayed above $215.
And that’s what I love about this kind of trade: we’re in on Tuesday, and by Friday, as long as everything goes to plan — the trade automatically expires… no extra legwork needed.
We had a tripwire set at $219 just to be safe, but as with most weeks, the stock never hit it.
The Results
AVGO fell all week, going down as low as about $221.
By Friday’s close it had bounced up to close the week at $224.31, comfortably above our $215 strike.
That means the trade worked out perfectly — the options expired worthless, and we kept the full premium.
What’s Next?
I do want to point out one thing worth paying attention to: AVGO’s chart is showing signs of losing its bullish momentum.
It’s not a full reversal yet, but I wouldn’t be surprised if we shift to bearish trades on AVGO in the coming weeks.
Final Thoughts
This trade was a great example of how our preparation and overall strategy help us stack the odds in our favor.
By picking a trending stock and trading it in a way that didn’t require it to move exactly the way we expected, we nabbed a solid win on a week that left most traders shaking their heads.
And my favorite part about these trades is that they’re quick. We always enter these trades on a Tuesday and we always trade options that expire by Friday.
Who can argue with that?
Trade well,
Jack Carter
P.S. I went live with Geof Smith today to reveal the brand new research he’s done on the market’s opening bell. If you didn’t catch us live, I suggest you watch this right now.
