For Tuesday: Equities took it on the chin as the broader market sold off Monday. The leader, $AAPL, seemed to be rolling over. This could be repositioning in front of Wednesday’s FOMC announcement. While we wait for the FED to make their announcement the market is still bullish overall and there is a way to design a trade with a bullish stance. For example, suppose you beleive the general market will experience a rally after the FED makes a decision and you wanted to build a trade around this idea: Let’s use the $SPY. If you want more bang for the buck then you could use the $SPX.
|STOCK||$SPY (or $SPX)|
|OPPORTUNITY?||Call Debit Spread|
|IDEA?||Buy 1 Dec 20 470 Call and Sell 1 Dec 20 472 Call|
|RISK?||Max Loss is $69 per spread – Max Gain $131.00|
|HOW WILL I KNOW THAT I’M RIGHT?||If price trade to all-time new highs|
|HOW WILL I KNOW THAT I’M WRONG?||If the price trades below $463|
TO FIND OTHER IDEAS LIKE THIS: