Today I would like to make a suggestion on a stock that I believe should follow through to the downside.

That stock is Zendesk, Inc. (ZEN).

ZEN is trading around $87.61 as I write this

I am going to suggest an uneven straddle with a bearish bias.

And I am going to suggest you trade the March monthly options.

The suggestion will be an unequal straddle with a bearish bias.

The idea will be buy 2 puts for every 1 call.

Buy to Open (1) March 20th - $87.50 call @ $3.60
The 1 call will cost $360.

Buy to Open (2) March 28th - $87.50 put @ $3.00
The two puts will cost $600.

The total position will cost $960 or about 1% of the nominal portfolio.

The end result if you trade the suggested position size, is that you will own (1) March 20th - $87.50 calls and (2) March 20th - $87.50 puts.

While the Diary of a Mad Hedge Fund Trader focuses on investment over a one week to a six-month time frame, Mad Day Trader, provided by Bill Davis, will exploit money-making opportunities over a brief ten minute to three-day window. It is ideally suited for day traders, but can also be used by long-term investors to improve market timing for entry and exit points. Read more

While the Diary of a Mad Hedge Fund Trader focuses on investment over a one week to a six-month time frame, Mad Day Trader, provided by Bill Davis, will exploit money-making opportunities over a brief ten minute to three-day window. It is ideally suited for day traders, but can also be used by long-term investors to improve market timing for entry and exit points. Read more

While the Diary of a Mad Hedge Fund Trader focuses on investment over a one week to a six-month time frame, Mad Day Trader, provided by Bill Davis, will exploit money-making opportunities over a brief ten minute to three-day window. It is ideally suited for day traders, but can also be used by long-term investors to improve market timing for entry and exit points. Read more

While the Diary of a Mad Hedge Fund Trader focuses on investment over a one week to a six-month time frame, Mad Day Trader, provided by Bill Davis, will exploit money-making opportunities over a brief ten minute to three-day window. It is ideally suited for day traders, but can also be used by long-term investors to improve market timing for entry and exit points. Read more