The Options Prophet

Calendar Icon   Monday, 8th March 2021

ASX 200 Index – XJO

Bought Put – XJO.ASX

The market has been showing weakness since it made a recovery high on 17th February this year. To take advantage of a market fall, the purchase of an index Put over the XJO is a simple way to trade the downside or hedge your portfolio.

A Bought Put would rise in value as the index falls and we look to an April expiry to allow the strategy enough time to work.

An April 6750 Put is trading around $1.25.

* Please note; We also mentioned the use of BBOZ as a method of hedging against a market downturn in the Weekly Wrap. There are multiple ways to hedge or trade any possible downside in the XJO.

XJO Table

Please call the trade desk on 1300 886 103 should you wish to discuss further.

XJO Chart

BHP Ltd

Bought Put – BHP.ASX

BHP rallied hard after its recent profit announcement, as the market chased the $1.29 dividend that went ex on 4th March. BHP rallied to a record high at $50.93, yet closed last week at $48.23.

There is a risk that the stock will fall back to previous support near the $45.00 level.

To take advantage of this a Bought Put would rise in value as the share price falls.

An April $48.50 Put would cost approximately $1.53 per contract.

BHP Table

Please call the trade desk on 1300 886 103 should you wish to discuss further.

BHP Chart

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