NASDAQ Biotech ETF (IBB) - Bullish Breakout Options Trade
On Friday's Options Action, the crew analyzed the performance of the biotech sector. The NASDAQ Biotech ETF (IBB) that tracks the large cap names have underperformed the overall sector recently. IBB has recently formed both a long term cup & handle formation and an inverted head & shoulders, a bullish setup. Coupled the largest 5 names in this ETF reporting earnings this week, provides a potential catalyst for the ETF to break higher. Expecting IBB to breakout to the upside, Michael Khouw suggests buying a Sept 113/119/125 Call Spread Risk Reversal for a $0.70 Debit. As of Friday's close, this spread is trading at $0.65.
We've structured this trade in OptionsPlay so you can analyze and view this trade along with the supporting technical chart at your convenience.
View this OptionsPlay on IBB - app.optionsplay.com/
Cost: $65
Max Reward: $535
Max Risk: $11,365
POP: 43.18%
Breakeven: $119.65
Days to Expiry: 61
We've structured this trade in OptionsPlay so you can analyze and view this trade along with the supporting technical chart at your convenience.
View this OptionsPlay on IBB - app.optionsplay.com/
Cost: $65
Max Reward: $535
Max Risk: $11,365
POP: 43.18%
Breakeven: $119.65
Days to Expiry: 61
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