Most Traders Buy When a Trend Hits Support. Chris Vecchio Sells a Put Spread Instead

Futures and options trading: what do you do when a trending market falls back into support? Chris Vecchio walks through a short put spread on the E-mini Russell 2000, RTYU6, which has bounced off the zone between its one month and 50 day moving averages since early April. Selling the 2875/2850 put spread below support brings in a credit with defined risk. The best part: the Russell does not even need to rally. It just needs to hold above support and not break down. Presented with @cmegroup 📊 tastylive: https://www.tastylive.com/ 📰 Get Tom's pre-market analysis every morning: https://www.tastylive.com/newsletters 📘 FREE Options Strategy Guide: https://tinyurl.com/bp9ms763 📱 Follow tastylive on X: https://x.com/tastyliveshow Chapters 00:00 What to do when a trend falls back to support 00:10 The Russell 2000 trend since early April 00:30 The trade: sell the 2875/2850 put spread below support 00:46 Why the Russell does not even need to rally 01:08 How a short put spread works: credit and defined risk 01:33 The cost map: $50 multiplier, $300 credit, $950 max loss 02:05 137 points of room below the market 02:27 Why 43 days to expiration gives flexibility 02:49 Managing at 50% profit, no need to wait for 21 days 03:03 The risk: losing the 50 day moving average 03:26 Monetizing support with defined risk long deltas #tastylive #russell2000 #futures #putspread #optionstrading #definedrisk #cmegroup #fiveminutefutures #smallcaps #tastytrade tastylive is a real financial network, producing hours of live programming every day. Follow along as our experts navigate the markets, provide actionable trading insights, and teach you how to trade. With over 120 original segments, and over 25 personalities, we'll help you take your trading to the next level, whether you are new to trading or a seasoned veteran. tastylive content is created, produced, and provided solely by tastylive, Inc. ("tastylive") and is for informational and educational purposes only. It is not, nor is it intended to be, trading or investment advice or a recommendation that any security, futures contract, digital asset, other product, transaction, or investment strategy is suitable for any person. Trading securities, futures products, and digital assets involve risk and may result in a loss greater than the original amount invested. Investment information provided may not be appropriate for all investors and is provided without respect to individual investor financial sophistication, financial situation, investing time horizon or risk tolerance. Options, futures, and futures options are not suitable for all investors. Prior to trading securities, options, futures, or futures options, please read all applicable risk disclosures, including, but not limited to, the Characteristics and Risks of Standardized Options Disclosure and the Futures and Exchange Traded Options Risk Disclosure Statement found at https://tastytrade.com/disclosures/. Past performance is not indicative of future results. Performance is not presented net of all commissions, fees, and expenses. Multi-leg option strategies incur higher transaction costs than single leg trades as they involve multiple commission charges. Examples provided are for illustrative, informational, and educational purposes only and are not intended to be reflective of results you can expect to achieve. Supporting documentation for any claims, including claims made on behalf of options programs), comparisons, statistics, or other technical data, if applicable, will be supplied upon request. tastylive, through its content, financial programming or otherwise, does not provide investment or financial advice or make investment recommendations. tastylive is not a licensed financial adviser, registered investment adviser, or a registered broker-dealer.