PREMIUM: We're Going LONG This Forgotten ETF

This article and the views within are from trader Nic Chahine. This article is only available to Benzinga Premium subscribers.

The Thesis: ARK Innovation ETF ARKK is showing a tactical opportunity. It is worth holding a bullish setup. Tactical means TRADE not INVESTMENT. So I am putting on a smaller size and fast stop loss levels.

The Trade: I prefer taking risk that doesn’t need a rally to win. In this case it is selling a credit put spread

1. Sell April 1st $49 put (mark $0.86)
2. Buy April 1st $48 put (mark $0.71)

The net credit is $0.15

I don’t need a rally to win

I would stop out if price falls below $56

Alternate Trade: This one requires a rally to win.

1. Buy April 14th $60 call; Cost is -3.95 (mark)

This trade yields the fastest win, but also would lose fastest

This trade needs a rally to win

I would stop out if price falls below $56 or lose -30%