Although it is not exactly bull market territory, and perhaps not even a bear market rally underhand... there are times when a stock has a compelling reason to rally to the upside anyway - and that is in STOCK SPLIT TERRITORY! The market is finally beginning to experience stock splits more periodically so perhaps it is time to share a favorite strategy to teach - CHICKEN BULL PUT SPREADS!

1. 1. CHICKEN refers to me doing it at the last minute, so the obligation is only one day. Meaning you do the BULL PUT SPREAD (BUPS) the day before expiration date.
2. 2. BULL means the stock is expected to go up.
3. 3. PUT means put options are being used
4. 4. SPREAD refers to doing both buying and selling the puts, and in this case it is a vertical spread where the expiration dates are the same. Consider using the front month expiration date so that the obligation is short.

The neat thing about bull put spreads is that traders who are not qualified or do not have the available trading capital to sell naked puts are able to accomplish this with less risk by just adding an insurance policy (buying puts). They are able to do this trade when they are not qualified to sell naked puts! Bottom line...YOU CAN DO IT!

To be more conservative, look for the support line of the stock. Once you know what the price is, consider selling a put with a strike price below the support line price. Then purchase puts one strike price lower than the puts you sold.