Today’s MRKT Call is Presented by Fidelity

Market Sells Off: What's the New Risk On Trade?

Dan Nathan, Guy Adami and Carter Worth break down the top market headlines and bring you stock market trade ideas for Tuesday, April 2nd

Topic Timecodes:
New Risk On? (0:00); Silver Trade Idea (11:30); XLF Trade Idea (20:45); GOOGL Trade Update (26:00); Tesla Chart (32:30)

Click here to access all of the charts mentioned in today’s MRKT Call.

Buy June 24/26 Call Spread for ~$0.55

• Buy to open 1 June 24 call at ~$1.10

• Sell to open 1 June 26 call at ~$0.55

Break-Even on June Expiration

• Profits of up to $1.45 between $24.55 and $26 with max gain above $26

• Losses of up to $0.55 between $24 and $24.55 with max loss below $24

Trade Rationale & Management

• This trade idea risks 2.3% of the ETF price, has a break-even up of less than 4%, and has a max potential payout of nearly 3 to 1 if the ETF is up 10% in two and half months

Buy Apr 19th 41.50 put for $0.43

Break-Even on Apr 19th Expiration

• Profits below $41.07

• Loses of up to $0.43 between $41.07 and $41.50 with max loss above

Trade Management & Rationale

• This trade idea risks 1% of the ETF price, has a break-even down of 1.5%, and catches big bank earnings

Trade Update: 

• With GOOGL ~$153 the May 150/170 call spread that cost ~$5 on March 19th when the stock was ~$146.50 is now worth about $7.30

• It makes sense to rolls this trade up and out to catch AAPL's WWDC on June 10th

Action: Sell to close GOOGL May 150/170 call Spread at ~$7.30

New Trade: Buy to open GOOGL June 155/175 call spread for ~$6

• Buy to open 1 June 155 call for ~$8.50

• Sell to open 1 June 175 call at ~$2.50

Break-even on June expiration:

• Profits above $161, a max gain of $14 above $175

• Losses of up to $6 between $155 and $161 with max loss below $155

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WHAT WE’RE READING

• Dow Tumbles More Than 350 points, Falling for a Second Day in Rough Start to New Quarter (CNBC)

• Stocks Fall on Fears Rate Cuts Will Be Delayed (Bloomberg)

• Fed's Loretta Mester Says Three Rate Cuts Still Reasonable (WSJ)

• U.S. Crude Oil Cracks $85 to Hit Highest Level Since October as Geopolitical Tensions Mount (CNBC)

• Tesla Disappoints Analysts by Most Ever in Brutal Blow for EVs (Bloomberg)

• Bitcoin Is Soaring This Year. Goldman’s Crypto Skeptic Isn’t Biting. (WSJ)

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