[Buying Puts on Whole Food Markets (WFMI)/Buying May 80 Puts (FMQQP)/Day Order/Limit $7.80]
I rarely seek to trade against a trend and Whole Food Markets (WFMI) has been in a long uptrend. However, several days ago, there was a bearish engulfing candlestick pattern followed by a down day on high volume. Since then, the stock has broken down through a support. Nevertheless, I consider my play to be highly speculative. I am placing an order to buy the May 80 Puts (FMQQP) for a limit of $7.80 on a day order. I plan to exit fairly quickly if this one goes against me to minimize any loss. On the 1st target side, if the stock drops, I am looking at a stock price of around $69.50. The stock is currently trading around $76.15. The options I am trying to buy have a delta of about -.52 so initially, I would expect the option price to move about 50 cents for each dollar move in the stock.
DISCLOSURE: At the time of publication, I have no position in the referenced options or the underlying stock.
Sincerely,
Bill Kraft for
CutLoss, Inc.
|
