Amazon Long Put

Here's a trade idea for 2023-10-26 : Create a Long Put on Amazon with a 120 strike price. The trade idea here is to purchase a Long Put option on Amazon with a strike price of 120. This means that the option gives the holder the right to sell Amazon stock at a price of $120 per share at a later date. It makes sense to pursue this trade idea because Amazon is a large and well-established company with a high degree of market diversification. However, like any stock, Amazon is subject to market fluctuations and uncertainties, so it is important to manage risk effectively. One way to reduce risk in this trade is to use a suggested Stop Loss at 25%. A Stop Loss is a predetermined point at which a trader will exit the trade if the stock price falls below a certain level. In this case, a Stop Loss at 25% means that the trade will be exited if the stock price falls by 25% or more below the strike price of $120 per share. This helps to limit potential losses and protects against unexpected market downturns. By purchasing a Long Put option, a trader can earn income on this trade if the price of Amazon stock falls below the strike price of $120 per share. If the stock price does decrease, the trader can then exercise the option and sell the shares at the higher strike price, earning a profit on the sale of the shares. The Long Put option allows for a high degree of flexibility and can be an effective tool for managing risk in volatile markets. Overall, this trade idea is a smart strategy for traders who are looking to take advantage of market fluctuations while also protecting against potential losses. By utilizing a Stop Loss and taking advantage of the flexibility of a Long Put option, traders can effectively manage risk and maximize potential profits. This is not investment advice. We encourage you to seek advice from a qualified professional before making trading any securities.