UAL Bullish inclined Naked Puts 10 Dec Expiry (Dec Track 1)Whats The Plan/Trade/Thought
This trade is slightly risky as it is not an ETF. But it's current price movement mirrors JETS etf and this will allow me to get a decent price based on my outlook on travel as a sector
Overall we are seeing Leisure and Hospitality with the largest job gains (Oct data). However in terms of Job postings, while all sectors are seeing increases. Hospitality & Tourism have the lowest postings
If you look at the high Job Gains and the low Job Postings. We can make the assumption that people are filling up Leisure and Hospitality jobs easily but the supply of jobs is just not enough for the number of candidates available.
This also means that the Leisure and Hospitality sector are being very very cautious and this is reflecting in the price movements despite the largely bullish S&P moves. However it is not contrarian, just dulled and pensive
UAL in Oct has also posted higher than expected revenue but is still below 2019 numbers (Before COVID19)
UAL has made higher lows in the past 2 months
I Feel
I feel I have a good assumption that is a reflection of the current market movement. I am also not predicting any direction in my analysis
Imagine Yourself Taking The Other Side
This is an easy position to take the other side even if I was bullish. The price is currently ranging and while it has previously broken the resistance line at 51. It has whipped back below the line.
It is possible for it to continue to range down to 43.20 and still hold true to my thoughts on the sector
Imagine Yourself As A Neutral Observer
This trade is slightly worrying based on the position of the Strike within the range.
But if I follow the overall market bullishness I feel we are at least standing on the right side of the fence.
Look For New Information
No new information, but current price movement on the 15 Nov has not followed Friday's drop and feels like it is testing the S&R line
How Do I Feel Now
I'm going to look at it from an hour, breath and then enter if nothing comes up
Trade Specs
Sold 160 Puts @ 0.33 - Strike 44
% to Strike 12.23%
ATR % is around 1%
BP used 70k
Max Gain: est $5280
