A Short and Long Term Trade in $HOOD

$HOOD

HOOD 0.00%↑ has been selling off since last Wednesday, after a month plus move up to 52 week highs.

It’s hovering near its rising 20 day moving average, and I expect the movement from here will say much about how the summer goes for this name.

The longer term chart also looks great -

I’m attacking this one on both a short term and long term basis. I’m selling short term call spreads (next week) against the recent 52 week high level of $24. I’m also selling long term put spreads against the AVWAP from IPO, which is $17 (pictured above).

If the stock bounces off the 20 day moving average here and accelerates back towards that recent high, I’ll be buying stock at an entry price of $24. If it fades further below the 20 day, my call spreads will close out and I will have collected the premium. My put sales at $17 will have decreased in value, but I want to own the opportunity to own HOOD 0.00%↑ at $17 as long as the stock is above that AVWAP.

More to come on this, as I expect we’ll get some confirmation before the weeks up.