Tuesday, September 29, 2009

MA Bear Put Spread


Mastercard (MA) is having some relative weakness today and the last week in the markets. The daily chart looks to be putting in a bear flag and having trouble near 210. I think MA is looking toppy here and could retrace all the way back down to the gap zone down at 190ish in the next few weeks. Also, if this market rolls over and retraces into October like I tend to think it may; then MA will be a fast mover imo.

Buy the 200 puts in October and sell the 180 puts for a bear put spread that costs roughly $3. 


MA options looks relatively cheap on an implied volatility basis as IV in Oct is around the mid 30s. Max the spread can be worth at Oct expy is $20.

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