It is time once more to consider getting on board Cathie Wood's ARK Innovation exchange-traded fund.

$ARK Innovation ETF(ARKK.US)$, which owns many of the stock market's most controversial and most intriguing companies, seems to be on the cusp of entering a higher trading range after a month of troubles.

The Innovation ETF is hovering around $130, a level that has often proved to be difficult for the fund to stay above for long. But the recent rotation back into technology -- and away from value stocks that benefited from the seeming end of 2020-- could give the ETF a push higher.

Aggressive investors who want to wager on the potential breakout can consider an options strategy that pays them for agreeing to buy the fund at a lower price, while letting them participate in future gains.

When the Innovation ETF was trading around $130, the September $129 put could be sold for about $9 and the September $132 call could be bought for about $7.70. The risk reversal -- that is, selling a put and buying a call with a higher strike price but with the same expiration -- essentially pays investors $1.30 for agreeing to buy the fund at $129 and to participate in advances above $132.

If the fund is at $150 at expiration, the call is worth $28. Should the ARK Innovation ETF be at $129 or lower at the September expiration, investors are obligated to buy the fund at $129 even if the fund is trading sharply lower.

To avoid buying the fund on a decline, investors could adjust the put in the options market and move it to a different expiration. Of course, if the fund advances, and is above the put strike at expiration, investors can keep the put premium.

During the past 52 weeks, ARK Innovation has ranged from $69.18 to $159.70.

The risk-reversal strategy represents the evolution of a mid-May suggestion for investors to consider selling puts on the Innovation ETF when it seemed the fund was facing real trouble.

At the time, many of the fund's holdings were weak and out of favor as investors were abandoning growth stocks that were defensive holdings during 2020, while buying value stocks that would benefit from the reopening of the economy.

It seemed that many investors and market pundits were happy to see Wood struggle after the fund rose 153% in 2020. But we recommended that investors look past the difficulties and wager that Wood would prevail.

Rather than wilting under the pressure, she made a surprising and gutsy move. Wood took advantage of the weakness and essentially bought more stock as prices declined. The fund owns many stocks with extraordinary potential and often even more extraordinary valuations. The fund is closely associated with Tesla, its top holding, but the portfolio includes other companies that are also trying to reshape the world with technology, including Teladoc Health, Square, Zoom Video Communications, and Spotify Technology.

The June $85 put that we suggested investors consider selling at $2.30 when the stock was around $102 just expired worthless. The Innovation ETF, meanwhile, just traded at its highest level in two months. Since mid-May, ARK Innovation has gained about 35% -- and the fund could be on the cusp of a bullish breakout.

The fund traded above $130 from early January until March, only to come under bearish pressures during the recent rotation. The suggested risk-reversal strategy expresses a view that the Innovation ETF will trade above $130 into the fall, moving beyond a price that has often marked upside resistance.

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