Another late day selloff. If we get some bad news, where will the markets go?
I am guessing they get another day or two down. Which sets up some discounted stocks that have nice overall uptrends.
Obviously if we go down a little more, the premiums on the put side will go up. VALE has dropped over 15% and selling OTM puts for a 1 to 3 reward to risk isn't such a bad ratio for a credit strategy. AND you could put in a stop to be out at a 1 to 2 risk or 1 to 1 if you are risk averse.
I attached the chart and the option chain:
On the flip side, we have an ETF that focuses on companies in the water sector that are US based. The $9.5 mark sure looks like a nice entry given the amount of support - both for an investor and trader. Unfortunately due to the recent inception, low volatility and low liquidity, options are pretty much out of the question.
I will be back on Friday, but will update via mobile if I get into any longs over the next few days as I will be ambassadoring/hosting on the mountain at Deer Valley. A foot overnight would be nice!
Have a great week and Be Environmentally Cool with Locals Have More Fun apparel.
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