With Boeing Stock Below Its 50-Day Line, Consider This Option Trade

Core Viewpoint - Boeing stock has experienced a decline, falling below its 50-day moving average due to a weak earnings report, indicating a bearish outlook for the stock [1][5]. Bear Put Spread Strategy - A bear put spread can be established for Boeing using the 190 strike as the long put and the 185 strike as the short put, with a cost of approximately $75 per contract and a maximum potential gain of $425 [2]. - To achieve maximum profit, Boeing stock needs to drop an additional 13.4% by the expiration date of December 19 [3]. - The breakeven point for this trade is calculated at 189.25, factoring in the $0.75 option premium per contract [3]. Risk and Loss Potential - If Boeing stock is above 190 at expiration, the entire spread will expire worthless, resulting in a total loss of $75 [4]. - A stop loss can be set at 50% of the premium paid, equating to a loss of around $40 [4]. - The initial delta of the trade is -4, indicating exposure similar to being short four shares of Boeing stock [4]. Performance Ratings - Boeing stock has a Composite Rating of 55 out of a possible 99, with an Earnings Per Share Rating of 42 and a Relative Strength Rating of 69, all of which are considered weak [5].