Short term trade on Yahoo

aplus's picture

Yahoo has been rangebound between $32 and $35 for the past few weeks, and the S&P overall looks like it's topping out again at the 1765 level (worth looking at the chart).  The market is likely to correct in the near term, and Yahoo may be a good way to play just a slight decline over the next 6 weeks.  

A relatively cheap trade to make here is to buy the December 2013 $33 Strike Puts on Yahoo for $0.89 cents.  We will only hold these for a short amount of time, and are looking to make a quick  return on a drop in the stock.   If we hold this for 1-2 weeks, that's the sweet spot that we're looking for as we want to be out before we get into the last 4 weeks of expiration.

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