February 20, 2020 - MDT Alert (CDAY)

Today I would like to make a suggestion on a debit spread. The stock is Ceridian HCM Holdings, Inc. (CDAY).

CDAY is trading at $74.52 as I write this.

I am going to suggest a trade using the March monthly options. CDAY does not have weeklies, and the March monthlies will allow enough time to see if the stock breaks down.

My suggestion today is this:

Buy to Open March 20th - $75.00 put @ $3.00

Sell to Open March 20th - $70.00 call @ $1.25

Net debit is $1.75 per spread with a maximum gain of $3.25 per spread if CDAY trades below $70.00 by March 20th.

Based on the nominal portfolio, limit the trade to 6 spreads or 1% of the portfolio.

/by

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