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 Home Depot stock. HD has recently underperformed the homebuilder’s sector and recently broke below trendline support. Coupled with a weaker outlook on retail stocks and the economy, suggests HD may miss on earnings next week. Expecting HD to trade lower, Michael Khouw suggests buying a June 190/180 Put Vertical for a $2.50 Debit. As of Friday’s close, these puts were trading at a $2.77 Debit.