The idea presented is the opinion of the Options Action staff and not a recommendation by OptionsPlay.
On Friday’s Options Action, the crew analyzed the performance of Biotech. The biotech sector has underperformed over the past 2 years but has started to turn higher. Coupled with a cup and handle formation suggests a possible breakout higher. Expecting XBI to trade higher, Michael Khouw suggests buying a Sept 80/87/93 Call Risk Reversal for $0.00 Credit. As of Friday’s close, these options were trading at a $0.85 Debit.
We’ve structured this trade in OptionsPlay so you can analyze and view this trade along with the supporting technical chart at your convenience. You can also view the Options Action’s video by clicking on the following link: XBI OptionsAction Video
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