He expects Home Depot, up 12% since October, to fall: resistance at 325-335 and the trend line/gap fill near 334.85 should cap it. He is buying a Jan 15, 2027 325 put, against the grain as a 0.69 put-to-call ratio shows the market still bullish; the premise fails if price breaks the trend line and keeps rising.

We are looking for investment opportunities such as Home Depot stock, which has seen a remarkable rise. I've been following this stock; it's risen 12% since October. Yesterday, we noticed an upward price gap and the stock continues to rise.

Therefore, we at Verified Investing believe that this trend is leaning towards the downside. Therefore, we will focus on identifying the upward resistance levels at which we expect the Home Depot stock price to stop.

Normally, in day trading rooms or swing trading services, we sell this stock short, but this is not possible in the world of options. Here we can buy a put option, take advantage of this premise, and apply it to the options chain.

First, this clear white trend line from the highest point here on September 17, 2025. It starts here at this reference peak, cuts down through these two pivot peaks, then reaches a fourth pivot point here, and is now converging downwards here in this area.

It's still a bit far off , but testing this trend line would be at around 334.85, which is about $20 from the current price move.

Good. We also have a pivot point here at 33137. As we can see, this is a very heavy trading level. The price bounced above this level, then bounced off the trend line, then went back down to it.

As we can see, the price initially bounced off it , but then fell below it. The price tried to regain this level but encountered resistance. Since then, the price has repeatedly changed from support to resistance .

Therefore, I will give this level great importance as a means of resistance once again, especially since it has not yet been reached.

Since August, this trend line has had a chance to consolidate, and we are now witnessing a sharp upward movement . Sharp upward movements lead to sharp downward movements.

Now, there is a large gap here on the charts, which has been filled at 334.85. In this resistance zone, from the pivot peaks at 325 to 335, we have multi- factor resistance. So, what I'm saying in short is that I don't think the price will go beyond this area.

Yes, I will not join this movement. I am not afraid of missing the opportunity. I will not buy now that Home Depot's stock has risen by 12%. This is a quick overview of our expectations for a price drop.

So, as a beginner trader, I am looking to buy a put option here. Well, looking at the execution prices in that area, from 325 to 330, let's see if the overall market situation is suitable for finding an options deal.

Okay, we have prepared the Home Depot stock chart. This is approximately the exact price range. Is this clear? amazing. Okay, I'm ready to move on to the options chain and see if we can find a selling opportunity here.

Good. Now we will delve deeper into the series. Okay, we're looking at Home Depot stock here , and we're looking for a sell option here.

If you are watching us now, we are using the IBKR platform, Interactive Brokers. This is the platform we use daily to analyze the options chain. We're here on the put options side because we're looking for a price between 325 and 330.

Okay, Tabby, can we do the math together? Yes. Okay, you too, let's do this calculation together, so that you can master it and use it whenever you need it . Purchase price, let's use the execution price of 315 here.

Good. Okay, that equals 15, 15 and 0.7. Okay . The difference between them is $2. Good. We will take $2, that is the difference, and we will divide $2 by the purchase price , which is 1570.

So, $2 divided by 157. Correct. Oh, my God. Good. 15. We're using a calculator, guys. Wait a moment. It gives me 0.127 and a bunch of other numbers. Good. So, it's about 12 cents.

That is, about 12 or 12%. Yes, and it's still very good. Yes, it is close to being healthy to moderate.

So remember that we move the decimal point slightly. It hasn't been a long time since we all became good at doing calculations. Okay, so Tabby, what we just learned is that 12%, where does that fall?

This is our profit margin , right? So these are the impatient people . Where is this margin located? Is it healthy? Or unhealthy? I would say it is very close to being unhealthy, because we said that the healthy percentage ranges between 5 and 10%.

Good. This percentage of 12% is slightly closer to 15%. So I don't know. So, 15% is still considered healthy. Average. Good. So we're fine. So we are fine. It falls between healthy and average.

Good. If we have a good setup, this is still appropriate. Good. Good. Does this make sense? Yes. If we look at our profit margin , if it is closer to 20%, it will be riskier. We want to keep the deal in our hands. amazing. We do not trade them. Good.

So, I'm looking at the put option series here. I look at the weekly purchase options, I don't prefer them. I'm looking for options for the next several months. I was looking at the price range of 325 to 330.

We want to make sure we have a good delta value . So, now look at the date January 15th. Wait, is this the value of delta? Oh, 3.25. Yes. So, this is the right time to buy. Beautiful.

I like this Delta value. Yes, me too. Why do you like it, Tabi? The negative value is 0.5. A negative value means that it is on the put option side , and we are at that ideal point of 0.5.

What does that perfect score of 0.5 mean to you? It simply means the amount of profit we will make. What is the approximate probability? Yes, almost certainly. Yes. Yes. Yes. It's good, yes, exactly.

We are closer to profit here. So yes, excellent. Okay , yes, I like the execution price of 325 here.

Let's do another one now . Let's take the offer price of 325, which is 2330. Okay. Then the price difference is about 210. So we subtract 2330 from 2540 to get 210. Okay. Then we divide the result by 2330.

When calculating, we get 9 %. Good. That's good. I like this. And why do you like it? Because it is within the very healthy range of 5 to 10%. Yes. And why is it healthy? Is the price difference wide or narrow ?

The price difference is small. Good. With such a narrow price difference, will this result in poor or good execution? Good implementation because it reduces uncertainty and perhaps impatience. correct.

I might say something wrong. Not necessarily uncertainty. Expensive. Well, it's not really expensive. patience. I used this keyword. decent. Just using some adjectives. There's no need to worry. Friday . We are having fun . Okay, definitely.

So, I'm looking...okay, what can we do, guys? This is another general rule, and a great technique you can start with. The bid price is 2330 and the ask price is 2540. What we can do is what is called " walking the line".

Good . If we have enough time, we can start with the bid price and place a specific order, then wait 30 seconds to a minute to see if it will be executed. There might be a panicked salesperson.

If there isn't one , we can start from the middle. Where will this be? Approximately 24 and 24 and 10 cents. This is the middle. We can start from there, which is a fairer price, and then see if it will be implemented.

Okay, be patient. From 30 seconds to one minute. Most of the time, the market maker comes to us and asks us to execute the deal. In this way, we do not send repeated purchase requests for immediate entry , but rather seek to obtain a fair price.

Yes. With this option, we have the potential to miss out on the deal. This is the trade-off, just like a market order. If you send a recurring market request , you are telling the market: I want to enter now.

But you might get a very poor execution. With a fixed price order, the situation is similar. You are sending a request stating that you want this price or a better price. The same applies to options.

You can move towards the asking price, but it may never be executed , and you may miss the deal. Oh, my God! Yes. This is how the deal is set up today, guys.

We will buy a put option on Home Depot shares. Tabby said we have an excellent delta, which is negative because we are buying a put option, and the price difference is good. That's all for today.

Yes. Do we have any final words regarding the deal? We are buying a call option with a date of January 5th. It is not a purchase option. You are right. It's a sell option. I'm very sorry.

I saw the word "buy" and my mind went blank. Bear with me, all of you. Good. The expiry date is January 15, 2027. We are buying a put option at 325. The price is 12% higher at an accumulated resistance level.

The value of delta is -0.59. The negative value is good for us because we expect the put option price to decrease. This value of 0.5 is much higher than the 0.4 we prefer for a delta value in our target range.

The ratio of call to put options is 0.69, which means the market is still bullish. So we are going against the grain here. Yes, that's what we sometimes do here at "Documented Investment".

We follow a strategy that goes against the grain.

So we are going against the grain here. Yes, that's what we sometimes do here at "Documented Investment". We follow a strategy that goes against the prevailing trend. So, we are not seeking a hack.

Rather, we wait until this price breakout is exhausted, then we pounce and take the appropriate action. This is good. good.

The premise of this deal has failed. If the Home Depot stock price rises to the trend line you saw on the TradingView platform, and then breaks this line and continues to rise, the assumption becomes invalid, and you should exit the trade .

Make sure you apply this to your own deals, and take responsibility.