The Low Cost Bearish (Short Stock) Call Hedge Strategy For The Week Of – 10-14-19

Quick Take: Low Cost Bearish Call Hedge Strategy

Time Frame: One to Twelve Weeks.

Stock: Bearish Market Edge Opinion – Short Stock Position.

Desired Stock Price Direction: Sideways to Down.

Option Position: Short ATM Call – Long ATM +1 Call (Bearish Call Credit Spread) and Long ATM Deferred Call.

Desired Result: Stock stays flat or moves down in price.

Maximum Risk: The stock rises in value. The loss is offset by the amount of the credit spread and the appreciation in the deferred anchor call.

Summary: If the stock stays flat or moves down, the credit spread will expire worthless and you will keep the credit. However, the deferred call will increase in value in line with the short stock position price decline. If the short stock position moves up, the loss will be offset by the amount of the credit spread and the appreciation in the deferred anchor call.

The following are this week’s Low Cost Call Hedge Selections. Each week, if conditions warrant one or more new stock positions are added to the Open Positions list. These stocks have a Bearish technical Opinion from Market Edge. The stocks and option spreads are added to the portfolio based on Monday’s opening prices. The stocks are removed from the portfolio after twelve weeks or if the Market Edge Opinion is upgraded from Bearish. To  access The Low Cost Call Hedge informative booklet click on the Get The Booklet tab located on the home page or at the bottom of this page.

This Week’s Low Cost Bearish (Short Stock) Call Selections

There are no new selections this week:

Current  Open Positions