Today we are looking at applying a Bull Put Spread on Australia and New Zealand Banking GrpLtd (ANZ)
ANZ is currently trading at $28.63.
ANZ has been trading in an uptrend since its lows in late September last year. Since the highs near the start of the month though, it has just been largely tracking sideward. In doing so, it has allocated roughly $28 as a key support that it is reluctant to stay below. In addition, the uptrend line comes in roughly around these levels as well, keeping upwards pressure on the stock.
Finally, the Easter break will close the market for an extra two days over the next couple of weeks.
In this sideward market, we have been employing sideward strategies to great effect and with the two days of extra free time decay over Easter, we can look to apply one on ANZ. We can look to do a Bull Put, where profit is made if the share price rallies, or travels sideward. The risk of the trade is placed below the key support at $27.50. If the share price remains above $27.50 by expiry – April 15th, then the trade makes maximum profit. If the share price rallies before then, there is also an opportunity to close early for a good profit as well.
If you would like to learn how and when to use this strategy, and other strategies like it, then please contact us here at TradersCircle on 03 8080 5788. Alternately, you can download a free eBook off our website which runs through advanced strategies.