Snap Inc (NYSE:SNAP) has enjoyed a solid bull run in the past several weeks. But that bullishness is all tapped out for now. It’s time once again to bet against SNAP stock and bank a little profit from the coming decline.

If you’ve followed along for the past couple of months, you’ll notice that Snapchat stock is trending in a boom-and-bust fashion. In mid-October, SNAP stock rallied on growing bullish sentiment heading into the company’s quarterly earnings report.

The shares topped out near $17, before profit taking set in.

Click to EnlargeIt was the right move for many investors, as Snapchat’s earnings fell far short of expectations. SNAP stock plunged in early November as a result, bottoming near $12.

Back in October, I highlighted a Nov $12/$13 bear put spread to take advantage of this post-earnings bust, resulting in a potential return of more than 100% on the trade.

Following the bust cycle, SNAP stock was heavily oversold. Being the cult stock that it is, Snapchat shares were bound to pick up some bargain hunters with the shares at such low levels. Furthermore, seasonality and the market’s tendency to rally into the end of the year would also have a buoying effect on SNAP stock.

To take advantage of this boom cycle, I recommended a Dec $13/$14 bull call spread. The trade proved to be a bit on the conservative side, as SNAP stock broke through resistance at $14 and used that momentum to hit a high of $16.45 before turning lower once again. Still, bull call spread traders could have banked a return of more than 170%.

Looking at the chart, it’s clear to see that SNAP stock is once again in a bust cycle. The shares have exhausted both their oversold buying support as well as the market’s end-of-the-year rally. Potential technical support at both $16 and $15 has failed, and the $14 area is now in jeopardy if SNAP stock follows its former pattern.

SNAP options traders are also looking for a continued short-term decline. Currently, the January 2018 put/call open interest ratio rests at 1.35, with puts dominating the landscape heading into the new year.

Furthermore, January implieds clearly indicate that the $14 level is at risk. Options traders are pricing in a potential move of more than 8% for SNAP stock heading into expiration. This places the upper bound at $16.25 and the lower bound at $13.75. With SNAP stock showing weakness, the path of least resistance remains to the downside.

Two Trades for SNAP Stock

Bear Put Spread: Is SNAP a good buy? No. I maintain that you should avoid investing in Snapchat until the company gets its advertising situation under control. That doesn’t mean you can’t profit from the stock’s gyrations until then. With SNAP stock in the bust side of it’s boom-and-bust trend, traders might want to consider a Jan 2018 $14/$14.50 bear put spread.

At last check, this spread was offered at 18 cents, or $18 per pair of contracts. Breakeven lies at $14.32, while a maximum profit of 32 cents, or $32 per pair of contracts — a potential 77% return — is possible if SNAP stock closes at or below $14 when January 2018 options expire.

Put Sell: For a more neutral play on SNAP stock, traders might consider a January 2018 $13 put sell. Without an earnings report to drive the shares back toward $12, support should hold at $13, keeping this option out of the money.

At last check, this put was bid at 11 cents, or $11 per contract. The upside to this put sell strategy is that you keep the premium as long as SNAP stock closes above $13 when January 2018 options expire. The downside is that should SNAP trade below $13 ahead of expiration, you could be assigned 100 shares for each sold put at a cost of $13 per share.

As of this writing, Joseph Hargett did not hold a position in any of the aforementioned securities.