DailyPlay – SPDR S&P 50 ETF (SPY) – March 7, 2022

View SPY Trade

SPY Bearish Hedge Opening Trade Signal

Strategy Details

Strategy: Put Debit Spread

Strategy Direction: Bearish

Details: Buy to open April 14, 2022 $422/$387 Put Vertical @ $7.48 Debit

Hedge Signal: This is a bearish vertical spread trade on the SPY ETF to hedge against further market decline

1M/6M Trends: Bearish/Bearish

Technical Score: 6/10

OptionsPlay Score: 132

Entering the Trade

Use the following details to enter the trade on your trading platform. Please note that if there is a multi-leg option strategy, it should be entered as a single trade. 

Investment Rationale

As the implied correlation of stocks rise with the high market volatility, it is time to play more defensive, and placing a hedge to protect against further decline is our DailyPlay trade today. SPY’s trends have turned bearish and price has broken below a 2-year trendline indicating further downside is on the cards. With the ongoing crisis in Ukraine, the geopolitical picture is also negative. Thus, we will look to buy the April 14 $422/$387 put spread for a $7.48 Debit (Friday’s close price). This trade will act as a hedge against further market declines.

In the event that SPY opens significantly below $429, the strike prices may need to be adjusted accordingly.