Please read today's morning post. It's a good time to take profits, get to more cash and hedge your portfolio.
By the way, my opinion on NKE is they got greedy and priced themselves out of consumers' hands. As with many Top 10% bubble-dwellers, they took the fact that kids were buying $300 shoes and $100 shoes as a sign to make a lot more of those (for $10) than the $40 shoes they make for $5 and now their whole line is stuffed with high-end sneakers and Nike is neck-deep in sponsorship contracts they can't unwind while people are looking to downsize discretionary spending and, contrary to the opinion of your teen - sneakers are very discretionary.
Look at MCD, WEN, Dairy Queen, etc - All are advertising 2 for $10 meals now. That's what I've been paying for Happy Meals! Margins are squeezing all over and the consumers are hurting and companies that rely on getting discretionary money from the Bottom 80% are going to have a very tough road ahead.
SDS/Lunar - That's the makings of a good spread then! A nice hedge would be:
- Buy 50 SDS Sept $16 calls at $2.10 ($10,500)
- Sell 50 SDS Aug $18 calls for 0.75 ($3,750)
- Sell 20 F 2018 $11.75 puts for $1.60 ($3,200)
That's net $3,550 on 50 spreads that are $10,000 in the money at the moment so the only way you can lose is if the S&P goes up enough to raise SDS 10% (5% move higher on S&P) and you still have Sept calls to sell. F is, of course, just an example, any stock you REALLY want to own at the net price can be substituted and makes this a great trade (a Top Trade, in fact).
Thanks Lunar!
