WFC is in a long-term downtrend, but wants to reverse course. There is a resistance around the $24 area that has held except in mid May when WFC made its 52-week low at $22 and then bounced quickly back the next day to close at $24. I'm going to sell a Bullish Put Spread at the 22.50-20.00 strikes. Since we are in a downtrend I'm going to play it safe and I'm not going to sell naked just in case WFC wants to make a new 52-week low during the next two months. This is a negative probability trade (expected loss > expected win), so it may not be for everyone.20-WFC-01
- Opening Date: July 29, 2020
- Expiration Date: September 18, 2020
- DTE: 51
- IV: 44.94%
- IV Percentile: 59%
- Odds of Winning: 73.74%
- Odds of Max Loss: 12.38%
- Win: > 22.16 @ Expiration
- Loss: < 22.16 @ Expiration
- Reg-T Margin: $250
Chart Legend
- Green Area: 100% Win Zone. If we finish above or in the green area, we keep 100% of our initial credit. The size of the green area is the size of credit (our maximum win).
- Yellow Area: Danger Zone: We still win, but we have to give back some of the initial credit taken in.
- Red Area: If we finish in this area we have a loss. The size of the red area is the size of our maximum loss.
- 1 standard deviation, 2 standard deviation, 3 standard deviation projections from Opening Date to Expiration Date are included.
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The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.