Applied Materials Inc. (AMAT) suffered its worst price drop in years, amid weak quarterly guidance, and a slew of economic uncertainties.
Scott Bauer said he would have traded AMAT with an options setup called a diagonal put spread, which would have netted a 250% return off the stock.
Scott’s breakdown of this AMAT trade is a great example on how bearish option spreads like diagonal puts are ideal for targeting high-profit potential trades in downtrending stocks, along with why factors like macroeconomics can have huge impacts in a stock’s performance.
Scott covers:
- Using bearish put spreads to target high-profit potential trades when a stock goes down
- What the setup of a diagonal put spread looks like
- How diagonal put spreads are structured to minimize risk exposure by capping losses
- Why quarterly guidance can make or break a stock’s next move
- The critical role macroeconomics plays in a stock’s performance
- Major factors that can overshadow traditional trading metrics in technical analysis
Here’s What’s Also Happening at Prosper…
A.I. is sparking an unexpected market disruption through a machine learning tool that identifies dozens of high-profit potential trade ideas by analyzing historical market patterns.
Charlie Moon will host a free live training tomorrow night, to demonstrate how his A.I. “trade finder,” uncovers dozens of potentially explosive stock plays in seconds each day that are backed by historic returns and win rates.
