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New IRA Trade in Facebook

Facebook has developed an investor-class of "bagholders," but the price action is getting extreme and we're getting to the lower range of what the initial pricing should have been at 28.

Here's the trade:

Sell to Open -4 Jul 26 Puts at 1.50

This puts your basis at 24.50, which gives you a return on basis of 6%. I would happily own FB at that price and will sell calls against it if assigned in July.

by Steven Place

Steven Place is the founder and head trader at investingwithoptions.com/

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