Top Investing Today
  • Investing
  • Politics
  • Stock
  • Economy
  • Editor’s Pick
  • Investing
  • Politics
  • Stock
  • Economy
  • Editor’s Pick
No Result
View All Result
Top Investing Today
No Result
View All Result
Home Stock

BSX Stock Slump? Discover This Winning Option Strategy

BoldThemes by BoldThemes
April 2, 2025
in Stock
0
BSX Stock Slump? Discover This Winning Option Strategy
0
SHARES
4
VIEWS
Share on FacebookShare on Twitter

When the stock market lacks clear direction, options strategies can be a dependable friend. I often go through the OptionsPlay ChartLists in StockCharts to look for stocks that show potential trading or investing opportunities. 

On Tuesday, as I was scrolling through the Bearish Trend Following Strategies in the OptionsPlay Strategy Center, using a balanced risk profile and max risk of $2,500 as the criteria, a long put on Boston Scientific Corp. (BSX) stock showed up on the list with a relatively high OptionsPlay score.

The closing stock price of BSX on Tuesday was $101.24 and was approaching its 50-day simple moving average (SMA), which could act as a resistance level. Its relative strength index (RSI) was hovering around 50, and the percentage price oscillator (PPO) was close to the zero line. Not much changed on Tuesday (see chart below).

FIGURE 1. DAILY CHART OF BSX STOCK. The stock price is approaching its 50-day SMA but momentum seems to be slowing as indicated by the relative strength index and percent price oscillator. Chart source: StockCharts.com. For educational purposes.The RSI and PPO indicate that momentum has slowed in the stock. So there’s a chance the stock price of BSX could hit the resistance of its 50-day SMA and fail to break above it, or it could break above it and continue higher. The short-term directional bias is neutral and could be a viable options trading candidate. 

Let’s see what strategies the OptionsPlay Explorer comes up with for a bearish outlook on the stock price of BSX. 


How to access OptionsPlay. In the SharpCharts workbench, select Options > OptionsPlay. Then compare the three optimal strategies. 


FIGURE 2. OPTIMAL STRATEGIES FOR TRADING BSX FOR A BEARISH SCENARIO. Shorting BSX, buying a put, and a long put vertical are viable trading strategies for BSX. When selecting a strategy, select one that aligns with your comfort level. Image source: StockCharts.com.

The two options strategies with relatively high OptionsPlay scores are the May 16 105 put and the May 16 105/90 put vertical spread. If you shorted 100 shares of BSX instead of trading options on the stock, your return would have been lower (see left panel). 

Both options strategies, i.e., the long May 15 105 put and the May 16 105/90 put vertical, look viable but a bearish move isn’t confirmed in the daily chart of BSX. There’s a chance the stock price of BSX will remain between $90 and $105 for an extended period (dashed blue horizontal lines). Because of the lack of directional clarity, I’d prefer to opt for the put vertical. You’re still buying the long put but adding a short put at a lower strike price with the same expiration date. This will offset the long put’s cost. 

Your risk is limited to $555 with a potential reward of $945. The trade will be profitable if the stock price of BSX closes below $99.45 before the contract expires. As of this writing, there’s a 48.6% probability of this happening.

Remember, stock prices are dynamic so what you see today may not be the same as what you see tomorrow.

Keep the following points in mind:

  • You’re considering a bearish strategy when the short-term trend is neutral. 
  • BSX reports earnings on April 30, which is before the options contract expires. 
  • Keep an eye on implied volatility since it can change significantly during earnings. It’s important to manage your open trade. There are many ways to do this. View our educational webinars to learn more about how to manage your option trades.

The Bottom Line

With tariff announcements looming, it’s probably a good idea to hold off placing trades until after we know what tariffs will be implemented. Things could change on Thursday and BSX’s stock price shows a clear upside or downside. Review the optimal strategies before placing an option trade, and only place a trade if you are comfortable with the risk-reward tradeoff.


Disclaimer: This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.

Previous Post

EXCLUSIVE: Jubilant Mike Johnson claims victory as Florida helps House GOP grow majority

Next Post

Trump touts return of the ‘American Dream’ in historic tariff announcement

BoldThemes

BoldThemes

Next Post

Trump touts return of the 'American Dream' in historic tariff announcement

  • Trending
  • Comments
  • Latest
The Connectivity Standards Alliance Product Security Working Group Launches the IoT Device Security Specification 1.0

The Connectivity Standards Alliance Product Security Working Group Launches the IoT Device Security Specification 1.0

March 19, 2024
Israel says UN ‘deceiving’ world over aid delays to Gaza

Israel says UN ‘deceiving’ world over aid delays to Gaza

March 28, 2024
Conservative backlash to Israel aid bill could force Johnson to seek Democrat support again

Conservative backlash to Israel aid bill could force Johnson to seek Democrat support again

February 6, 2024
Gold and Silver Set to Smash Records: Could 2024 Be Their Biggest Year Yet?

Gold and Silver Set to Smash Records: Could 2024 Be Their Biggest Year Yet?

May 17, 2024

State Dept says DOGE’s changes will be permanent amid Musk’s departure

0
Amid growing criticism of Biden foreign policy, experts credit wins while leaving room for improvement

Amid growing criticism of Biden foreign policy, experts credit wins while leaving room for improvement

0
Conservative backlash to Israel aid bill could force Johnson to seek Democrat support again

Conservative backlash to Israel aid bill could force Johnson to seek Democrat support again

0
Precision Manufacturing For Sensitive Equipment With CNC Machining

Precision Manufacturing For Sensitive Equipment With CNC Machining

0

State Dept says DOGE’s changes will be permanent amid Musk’s departure

May 30, 2025

DOGE staffing shakeup as Elon Musk hangs up his hat, White House confirms

May 29, 2025

Jill Biden should have to answer for ‘cover up’ of former president’s decline, White House says

May 29, 2025

Less than half of DOGE-terminated contracts can be publicly tracked, only about a quarter of grants: watchdog

May 29, 2025
Enter Your Information Below To Receive Trading Ideas and Latest News

    Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!

    Recent News

    State Dept says DOGE’s changes will be permanent amid Musk’s departure

    May 30, 2025

    DOGE staffing shakeup as Elon Musk hangs up his hat, White House confirms

    May 29, 2025

    Jill Biden should have to answer for ‘cover up’ of former president’s decline, White House says

    May 29, 2025

    Less than half of DOGE-terminated contracts can be publicly tracked, only about a quarter of grants: watchdog

    May 29, 2025
    • About Us
    • Privacy Policy
    • Terms & Conditions
    • Contact

    Copyright © 2024 Topinvestingtoday.com. All Rights Reserved.

    No Result
    View All Result
    • Investing
    • Politics
    • Stock
    • Economy
    • Editor’s Pick

    Copyright © 2024 Topinvestingtoday.com. All Rights Reserved.