Check out the Pinterest (Ticker: PINS) stock chart:
PINS has had quite a runup since trading a low of $53.94 on May 13 to closing at $76.84 on Friday.
I believe Friday’s candlestick could be a doji signaling an end of this rally and a possible pullback to at least $65.
Shopping for some cheap puts, I like the July 16 expiration, which is the regular monthly cycle with 21 days until expiration.
If PINS opens and trades lower on Monday, I like buying the slightly out-of-the-money 76-strike puts with an implied volatility of 39.99 and selling the 71-strike puts with an implied vol of 41.
Not a huge difference between the vols but it is something and it gets me in for fewer dollars.
I would pay around $1.65 for this five-point call spread.
I will take my losses if the spread trades down to $1.10-$1.15 and begin to take profits as the spread trades towards $3.00.
Back to dreaming about retirement!
Thanks for Reading … See You Next Tuesday!