XLI Long Put Spread

BA has a lot going for it. It scored good earnings yesterday, the Fed looks like it will keep rates low for a while, and one of its 777s registered to Russian airline Nordwind was recently spotted in Caracas ready to spirit away some of Venezuela’s gold reserves. Hey, when 20 tons of socialist gold are at stake, you don’t go with Ilyushin, you go with Boeing! BA is also about 9% (the largest) of the holdings of XLI, the industrial stock ETF. That’s one reason XLI has been rallying. Another is the likelihood of big industrial companies continuing to boost their stock prices with share buybacks because of low rates. But with uncertainty increasing about the trade war with China that could impact all of the big companies in XLI, which might lead you to think that its rally is due for an end. If you are bearish, the long put vertical that’s short the 71 put and long the 73 put in the March expiration with 43 DTE is a bearish strategy that has a 66% prob of making 50% of its max profit before expiry and that generates $.23 of positive daily theta.

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