Special Trade Alert: Alternative Trade for November 1, 2023
Earlier we sent you a Constant Cash Flow trade on Top Build (BLD). Unfortunately, the market makers changed their bids as the sell orders came in, so you were most likely not filled.
Earlier we sent you a Constant Cash Flow trade on Top Build (BLD). Unfortunately, the market makers changed their bids as the sell orders came in, so you were most likely not filled.
Here is your Alternate Constant Cash Flow Trade for November 1, 2023.
META is currently trading 22% above the strike price of this contract, with the latest price of $305.26 on November 1. According to TradeSmith's Smart Moving Average for META, the stock has been trading in an Up-Trend since May 22, 2023. The trade's Probability of Profit is currently at 89%.
Best & Worst Scenarios
BEST SCENARIO
If META closes above $249.64 on November 24, 2023, you will keep $36.00, the premium you received, the contract will disappear, and your buying power will be restored. There is an 89.00% probability of this happening.
WORST SCENARIO
If the stock closes below your strike price on day of expiration your broker most likely will execute the contract. You will keep the premium you received ($36.00) when you opened the trade and will purchase 100 shares of the stock for $250.00 a share. There is an 11.00% probability of this happening.
Trade Notes
This put contract obligates you to buy META at $250.00 a share if it gets assigned. (Remember... one option contract equals 100 shares of stock.)
Buying 100 shares at $250.00 each represents a potential obligation of $25,000.00.
Your broker will require you to have a portion of this money ("margin") or the full amount for a "cash secured" put set aside to open the trade. For more information about margin and how it is calculated, check out this video.
Here's how that situation works out for each option contract you sell...
Initial income from sold put premium of $36.00
Purchase of 100 shares of META at $250.00 is $25,000.00
Total outlay: $24,964.00
If the markets remain unchanged and META trades for more than $250.00 on November 24, 2023, you don't buy the stock. You keep the $36.00 premium (and the $24,964.00 in capital). That's a simple 1.44% return in less than one month. If we put this trade on every 18 days – assuming all prices remain the same – this could return 19.72% a year.
Trade Analytics
Probability 89%
ROI 1.44%
MAX PROFIT +$36.00
Underlying Asset Price Forecast
Key Statistics
⚡ Since META started trading, it has dropped 17.02% 30 times within 18 trading days.
⚡ The most META has dropped in 18 trading days was 39.48%.
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