This PGR Trade Wins Even if the Stock Drops 46% — Here’s the Setup

by Chris Pulver | Jul 15, 2026

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CPI came in far better than expected but the reaction was fairly muted by the end of the day Tuesday. We have PPI on deck this morning along with big banks reporting earnings, a couple of winners to discuss and more [tap to join us for the Daily Profit Plan]!

I just walked through a trade setup on Progressive (PGR) that perfectly demonstrates how I think about structuring high-probability positions with built-in protection.

With the possibility of a turbulent 30-, 60- or even 90-day window in the markets, this is exactly the kind of environment where I want trades that can absorb big swings without putting me at risk.

The beauty of this trade isn’t just the 95% probability of profit — it’s that PGR can drop 46% from current levels and I still break even. That’s the kind of downside cushion that lets me sleep well at night when the broader market feels unstable.

Here’s how I structured this and why the technical setup made it even more compelling.

The Trade Structure and Break-Even Math

I went with a 180 (December expiration) / 170 (January expiry) put ratio spread, and after some back-and-forth with the market, I collected $1.60 in credit. The fills were surprisingly generous — I actually had to double-check because the pricing seemed almost too good.

The key to this entire position is the break-even calculation. My break-even sits at $159, which is what creates that massive 46% downside buffer I mentioned earlier.

Think about that for a second. PGR is trading well above these levels and I’ve got a straightforward $100 profit potential as long as the stock doesn’t collapse nearly in half. Those are odds I’m willing to take all day.

Before settling on the 180/170 structure, I compared it to the 200/180 spread, which would have given me around $1.14 to $1.50 in credit for a $5 wide profit zone. But the 180/170 setup offered better risk-reward characteristics given where I think support sits.

Why the Yearly Moving Average Matters

This isn’t just about option mechanics — the chart structure played a major role in my decision-making process.

The five-period yearly moving average has been acting as a pretty solid outside support zone for PGR historically. We’ve bounced off this level multiple times in the past and the recent low came in at $189.

That moving average is sitting right around these support levels, which gives me additional confidence in the downside protection this trade provides. Even if we see more weakness in the near term, there’s a technical floor underneath this stock that’s held up before.

And in a market where data can flip sentiment instantly — where a single inflation print or a hotter-than-expected producer price index can send volatility surging — I want positions that already account for that uncertainty.

This is why I checked the broker-implied move before committing. The implied move was 3.3% while the historical average sits at 4.15%, which told me this wasn’t the right setup for a calendar spread. The ratio spread made more sense given both the volatility environment and the technical structure.

This is exactly how I approach individual stock positions — with defined risk, multiple ways to win, and technical levels that support my thesis. The market will decide whether I collect the full credit or if PGR tests that support zone, but either way, I’ve got a massive cushion built into this trade.

I’ll see you in the markets.

Chris Pulver
Chris Pulver Trading

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