Option Trade 
Southwest Airlines Co (NYSE:LUV) Puts
Thursday, July 30, 2015

**OPTION TRADE: Buy the LUV Sep 2015 35.000 put (LUV150918P00035000) at approximately $1.20. Place a protective stop loss at $0.45, and a pre-determined sell at $2.20.

by Ian Harvey

July 30, 2015

Southwest Airlines Co (NYSE: LUV), a passenger airline that provides scheduled air transportation in the United States and near-international markets, is very likely to suffer the August syndrome based on several factors.

Year-to-date, the shares have surrendered 15% to hover near $35.95, and saw a recent post-earnings rally attempt rejected by their 80-day moving average.

Most of the analysts have taken a positive stance with Southwest Airlines, even with the technical problems it has been experiencing.

Three research analysts have rated the stock with a sell rating, two have assigned a hold rating, but eleven have assigned a buy rating and one has even issued a strong buy rating to the company’s stock.

Southwest Airlines currently has an average rating of “Buy” and a consensus price target of $48.73.

Should August prove turbulent once again, LUV could fall victim to a round of downgrades.

LUV, too, has posted just two positive Augusts in the last 10 years, averaging a single-month loss of 3%. Of course, a repeat performance would simply add to the stock's longer-term descent.

The Harvey’s Options Volatility Indicator certainly shows that this situation is on-the-cards.

Therefore, based on the facts above, the following option trade is recommended…..

**OPTION TRADE: Buy the LUV Sep 2015 35.000 put (LUV150918P00035000) at approximately $1.20. Place a protective stop loss at $0.45, and a pre-determined sell at $2.20.

”Success is simple. Do what's right, the right way, at the right time.”

Option Tip for your Success!
Options traders are not successful because they win.
Options traders win because they are successful.



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