Here’s how you can profit from big moves in SNDK
Back on December 12th, I told you
that SanDisk was poised for a big move in one direction or another,
and that the best way to profit form that was to use a straddle or strangle
options spread. Well, since then the stock has moved up $17/share and has made
some really great options trading profits for those that listened.
Now we find ourselves in a very similar situation as
(
SNDK |
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PowerRating) tests 52-week highs today and looks poised for yet another breakout
in one direction or another:
Notice how SNDK is now challenging its old high. A penetration
and close above 66.00 would indicate further movement to the upside and a nice
breakout pattern. On the other hand, if SNDK pulls back here, it will form a
bearish double-top formation. In either case, it is very likely that SNDK will
move big over the next month or so, and owners of strangle options will likely
make a handsome profit. Also note that this same analysis can be applied to
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AAPL |
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PowerRating)
and
(
GOOG |
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PowerRating) right now if you look at their charts as well.
For strangle options, I always like to go at least 3 months
out with strikes that produce a net debit of under $1.00 for the put and call
combined.
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Andy Swan
Andy Swan created and
co-founded DaytradeTeam five years ago on a principle of empowering
individual stock and options traders with the techniques and analysis methods
typically reserved for elite professionals. His expertise in technical analysis
and commitment to educating members earned DaytradeTeam a top-ranking among
advisory services for several years.