Today we are looking at applying a Bull Put Spread on Australia and New Zealand Banking Grp Ltd (ANZ)
Analysis:
ANZ has been trading in a channel since March. Recently it returned to the bottom of the channel at roughly $27 and today has it bouncing higher. The falls were likely due to a cyclical selldown in the banks post report and dividend. The rebound today gives indication it may rise, or by the very least, hold the support at roughly $27.
To take advantage of this, a Bull Put spread can be implemented where all the risk is either at or under $27. This is done bone by selling at $27, or $26.50. Provided ANZ stays above the sold leg come expiry, maximum profit is made. This means that if ANZ tracks sideward or even falls a little bit, then profit is still made. Otherwise, if ANZ does move higher, the Bull Put provides the opportunity to close early for a nice profit too.
