My favorite trade this week is bullish for bearish reasons.
On Friday, I joined Marley Kayden and Rick Ducat on Schwab Network’s Trading 360 for their Big 3, and I laid out 3 trades, with the strikes and expirations for each one.
One is a bearish spread on the retailer I think is next to fall, while Walmart and Costco are already getting hit.
Another is a bullish bet on a sector that’s been pummeled this year.
I’m only making it because I’m looking for tech to sell off in the next few weeks, and when that happens, I expect the money to rotate somewhere.
And then there’s a short-term call spread on one of the biggest names in tech, set up for a gamma squeeze.
In a gamma squeeze, traders pile into calls, the market makers who sold them have to buy stock to hedge, and that buying pushes the stock into new highs fast.
Rick took each one apart on the charts, with the levels he’s watching.
To your success,
Don Kaufman
