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New Trade – Amazon (AMZN) weeklys Bull Put Spread, will it succeed?

Here is another new trade I plan to open tomorrow morning. It will be a bull put spread against Amazon (AMZN). The stock shows a great push up at the beginning of a new breakout trend. I believe it will repeat the previous cycle when it broke up from a squeeze.

If it repeats the same swing, the stock should go to $380 a share or even break up thru it.

Amazon

The chart above indicates what I am looking at and what my expectations are. If you look at the squeeze indicator, you can see that the stock broke up recently. Since markets are rhythmical I expect it to repeat the same or similar pattern (of course the trend may lose steam a lot earlier than the previous one, but I hope will be out of the trade by then).

With that said, I decided to open a new trade on Monday by selling a weeklys bull put spread. It is a credit trade and I should receive $130 for this trade. It is set to expire this week this coming Friday (Friday, July 25). If that happens I will collect a full credit.

Trade Detail

STO 1 Jul4 14 322.5/332.5 put @ $1.30

This trade consists from the following legs:

SELL 1 Jul4 14 332.5 put
BUY 1 Jul4 14 322.5 put

The trade will end in 5 days and it will have a max profit, if the stock ends above $332.5 at expiration day, which is July 25. Max loss of $870 will occur if the stock drops below 322.5 at expiration (and I hope this will not happen).

Happy Trading!

 
 





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