Trade Summary: November 14, 2016

| November 14, 2016

November 14, 2016

 

Trade Rationale

Wow, what a ride it’s been in the markets over the last week.  The surprise election results sent us on a huge rollercoaster ride.

In this case, I’m thinking about the big winners over the next few months, given Trump’s political leaning… There are a bunch of areas that will pop… but for my money… the big banks will benefit most.

Any Trump call for easing bank regulations, “Frank Dodd”, or reigning in the SEC / IRS will go a long way for bank profits.

But here’s the problem… the runup has already hit.  You look at these stocks and they’ve really run.  I think they’ll all see higher prices long term… but in the next 60 days, we should see some big pullbacks.  

One stock that could benefit is Citigroup (C)… they didn’t get as big of a move.

JP Morgan (JPM) has already jumped higher, and Wells Fargo (WFG) too.  So this week we’re buying 2 puts and one call on Citigroup.

 

Trade Details

#1) Buy JP Morgan (JPM) Jan 20th $72.50 Puts up to $1.70

Watch for JPM to move lower over the next few weeks as it has run up too much with the market and become overextended.  Profit exit points are $75 and $70.  Consider an early exit if the stock doesn’t slide a bit.  Exit at $80 or $81 to conserve capital.

JP Morgan

#2) Buy Citigroup (C) Jan 20th $55 Calls up to $1.70

Take profits if C trades above $57, or for aggressive traders, $59.  For risk control, the conservative exit level is $50.  Lastly, $48 is the final exit level for aggressive traders.

Citigroup

#3) Buy  Wells Fargo (WFC) Jan 20 $50 Puts up to $1.50

We want this stock to pull back a bit.  Profit levels are $49 and $47, conserve capital at $53 or $55.

Wells Fargo

 

Category: AOA Trade Summary

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