- Underlying: MNST
- View: Bullish, but expecting support to hold above $83.13, with a high probability of consolidation or a slow grind higher rather than an immediate explosive move.
- Strategy Type: Defined Risk, Credit Spread, Bullish
- Option Contract Portfolio:
- Sell 1 MNST June 18, 2026 $82.50 Put @ $1.325 (mid)
- Buy 1 MNST June 18, 2026 $80.00 Put @ $0.775 (mid)
- Max Gain & Loss: Max Gain = $0.55 Credit. Max Loss = $1.95 ($2.00 width - $0.55 credit).
- Initial Cost/Credit: Initial Credit of ~$55 per spread.
- Greek Exposure (Simulated):
- Delta: ~+0.25 to +0.30 (moderately positive)
- Theta: ~+0.015 (positive, benefits from time decay)
- Vega: ~-0.08 (slightly negative, benefits from stable or falling IV)
- Gamma: Low
- Rho: Low
- Rationale: This strategy is ideal for a cautiously bullish view with low IV. We collect a credit (positive Theta) for selling options that are statistically likely to expire worthless if the stock stays above $82.50. The sold put has a strike ($82.50) below the key primary support level ($83.13), providing a buffer. The long put at $80.00 defines and limits the maximum risk. The negative Vega exposure is acceptable as IV is already very low and unlikely to collapse further, but the position benefits if IV remains subdued.
- Time Frame: Medium-Term (to June 18 expiry).
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