Swing Trades (SGEN, AKAM)...

Seattle Genetics (SGEN) is biotech that has shown incredible growth over the last 3 years and is currently in a breakout pattern.

The trade:

     Long the stock at $50.71
     Long the September $42 Put at $1.65
   Stock to option ratio is 30:1
   The September put admittedly gives us scant leverage at just over 7x
     Breakeven prices on the trade are $56.21 on the upside (just over 3 ATRs to the upside) and $35.91 on the downside at expiration of the option

*I would be sure to size this trade accordingly because the option protection isn't great and there is a considerable amount of downside... that said, I like the stock and would definitely put on this trade.

Akamai Technologies (AKAM) is a cloud services technology company. The sector has been hit hard of late (QCOM, WDC, RAX, etc...) and AKAM is showing signs of a long term downtrend after recently reverting back to its 50 day moving average.

The trade:

    Short the stock at $72.78
    Long the September $77.5 Call at $1.44
    Stock to option ration is -40:1
    The September call provides >14x leverage
    Breakeven prices on the trade are $69.18 (slightly more than 3 ATRs to the downside) and $83.05 on the upside at option expiration

Comments

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