In our previous video, we explored the Profit Guard Option Strategy for protecting profits for directional option trades.
In this video, we will explore the Profit Guard Stock Strategy for protecting profits for directional stock trades. The Profit Guard Stock Strategy can profit in up, down or flat markets. Profit Guard Stock spreads have a long position and a short position. The long position profits as the stock moves up in price. The short position profits as the underlying stock moves down in price. The short position provides downside protection if the underlying stock declines in price.
The Profit Guard Stock Analysis below displays the profit potential for an actual Profit Guard Stock spread trade that we own for Boeing symbol BA. We purchased Boeing stock at 217.40 and had a profit in our stock position. At a later date we bought to open the BA Apr 340-Strike put option. This created a Profit Guard Stock spread.
This analysis reveals the profit potential for this stock spread trade assuming various price changes for Boeing at option expiration from a 100% increase in price to a 100% decrease in price. The analysis reveals:
BA up 50% at 326.10 at Expiration = $10,501 Profit and 44.7% Return
BA flat at Expiration = 44.7% Return
BA Down 20% to 100% at Expiration = 44.7% Return
Profiting on your stock trade when the stock is up, down or flat will result in a higher percentage of winning trades and this can make you a successful trader. Learn how to set up stock spread trades that can profit in up or down markets.