Given the high likelihood of a sell-off following the conclusion of the Federal Reserve meeting tomorrow, I am recommending we buy protective puts on some of our most volatile names. This will effectively turn the First Solar (FSLR), Mosaic Company (MOS), Roku (ROKU) and The Trade Desk (TTD) positions into spreads.
Note that these puts are being purchased as hedges. Ideally, the market will go up and these puts will expire worthless. However, in the event the market sells off sharply, the purchased puts could explode in value. If that happens, we will look to pocket profits to help offset our net debits and/or roll to lower strikes to keep our hedges in place.
FSLR Jun Monthly (6/17) 71 Put
Current Stock Price: $62.69
Net Debit: $12.42
Action: Buy to open the FSLR Jun Monthly (6/17) 62 Put for around $1.34, but adjust as needed to but a put today
New Net Debit: $13.76
MOS Jun Monthly (6/17) 59 Put
Current Stock Price: $52.35
Net Debit: $5.18
Action: Buy to open the MOS Jun Monthly (6/17) 52 Put for around $1.36, but adjust as needed to but a put today
New Net Debit: $6.54
ROKU Jun Monthly (6/17) 83 Put
Current Stock Price: $74.05
Cash in Hand: $0.94
Action: Buy to open the ROKU Jun Monthly (6/17) 70 Put for around $1.86, but adjust as needed to but a put today
New Net Debit: $0.92
TTD Jun Monthly (6/17) 50 Put
Current Stock Price: $45.93
Net Debit: $1.26
Action: Buy to open the TTD Jun Monthly (6/17) 44 Put for around $1.08, but adjust as needed to but a put today
New Net Debit: $2.34