ZEBRA Setup Example
Deep dive into an actual trade setup.
Be sure and check out the back-testing notes:
In the example video I set up a spread for $7.75 or single position price of $775. Alternatively, suppose you bought 100 shares at current price of $23.80 for $2380.
I suppose the price goes to $32.50. The net profit of the full share position would be $870. The net profit of the spread I estimate at $1000.
For the downside I estimate I would stop the trade around $18.50 or so. The stock loss would be $530. The spread loss would be right around the same amount of $530.
Conclusion
For the sake of risk management you can assume 1 position roughly equals 100 shares. This particular trade offered an attractive option price and should yield a higher upside the 100 shares of the stock alone. DYODD!
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The information provided is for educational and informational purposes only and should not be construed as investment advice. All investments carry risk, and past performance is not a guarantee of future results. Trading options involves a high degree of risk and is not suitable for all investors.