Today I opened a Bear Put Debit Spread in Johnson & Johnson (JNJ), positioning for a controlled pullback after a prolonged upside move and visible signs of short-term exhaustion.
JNJ has been trading in a persistent uptrend, but the daily chart is now showing clear overbought conditions. RSI is stretched, price is pressing near the upper range, and momentum is no longer expanding at the same pace. This is not a long-term bearish thesis — it’s an opportunistic pullback play.
Implied volatility remains relatively low (~22%), which makes a debit spread structure more attractive than selling premium at this stage.
Trade structure
Expiration: February 20, 2026
Contracts: 5
Buy PUT 230 @ 3.45
Sell PUT 225 @ 1.73
Net debit: $860
👉 View on OptionStrat
👉 Recorded in Trade Log
Trade thesis
My objective is straightforward:
If the underlying trades down toward $225, I plan to exit the position early and lock in $500+ in profit, without waiting for expiration.
This setup allows me to express a bearish short-term view with limited downside risk, while keeping the trade aligned with both price structure and volatility conditions.
As always, this is a tactical trade — size is controlled, risk is predefined, and patience will determine execution.
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Disclaimer
All content is for informational purposes only and does not constitute financial advice.Any trades or strategies should be tested in a simulated environment before use.Trading involves risk, and all decisions are the sole responsibility of the reader.
Strong read on the setup! The choice of a debit spread over premium selling in low IV enviroment makes alot of sense here. I've noticed JNJ tends to revert quickly when RSI gets this stretched, so the plan to exit early at $225 seems smart rather than holding for expiration. Controlled risk with a clear thesis is the way.