We’ve been itching to buy some DIA puts, since it’s quite possible the S&Ps topped in a major way two weeks ago. The broad averages have fallen moderately since, and although I would prefer to buy the puts when this vehicle is rallying, there can be no guarantees that Mr. Market will be so accommodating. Rather than try to predict the future, I’ll suggest buying some March 31 208 puts if they continue to fall to the targeted levels shown in the chart. More precisely, I’ll recommend bidding 1.08 for four puts and 0.76 for four more, good till canceled. Note that our bids sit just above, respectively, the secondary pivot and the D target of the price pattern shown, since we don’t want to risk getting shut out if the options bottom briefly at either number. This guidance pushes out our original put-buying strategy by a week, since we’d originally focused on the March 24 expiration. The trade is geared for subscribers of all levels of experience, including novices whose brokerage accounts are set up for options. I have posted the trade to The Scoreboard as well, revising my prior guidance. _______ UPDATE (Mar 15, 7:55 p.m. EDT): The puts dipped to 1.00, so I am tracking four at our bid price of 1.08. The trade has also been recorded on The Scoreboard. We still have a bid in for four more at 0.76. For now, offer two of the puts we bought for 2.16 — twice what we paid — good-till-canceled. _______ UPDATE (Mar 16, 8:58 p.m.): Continue to bid 0.76 for four more puts, but cancel the closing offer for two contracts at 2.16 to simplify things. _______ UPDATE (Mar 17, 2:53 p.m.) Subscribers reported buying four more puts for 0.76, as recommended. We hold eight of them now with an average cost of 0.92. Tie them to a 0.49 stop-loss and kiss the money good-bye. (Make no mistake here, we are bucking the Trump Rally and a bull market that just entered its ninth year.) Check the chat room for additional, always colorful, running commentary.
