SHLD (Sears Holdings) has been in a downtrend for a long time. It recently spiked on positive consumer data, but that won't last.
Strategy:
Wait for it to confirm this rejection by moving below $11. This ensures that it doesn't complete a flag pattern, breaking resistance.
Using April 21st PUT options could net a nice profit. There's currently 4,883 open interest and they're trading for 1.07/1.36. Assuming you buy when underlying is at $11, you'll pay about the current ask. Maybe $1.40. A collpase down to the $9 level within a few days will mean the option is worth at least $2, likely $2.25, representing an estimated 60% profit if target is reached.
Strategy:
Wait for it to confirm this rejection by moving below $11. This ensures that it doesn't complete a flag pattern, breaking resistance.
Using April 21st PUT options could net a nice profit. There's currently 4,883 open interest and they're trading for 1.07/1.36. Assuming you buy when underlying is at $11, you'll pay about the current ask. Maybe $1.40. A collpase down to the $9 level within a few days will mean the option is worth at least $2, likely $2.25, representing an estimated 60% profit if target is reached.