Quick Take: Blow Off Bottom – Bullish Trade
Time Frame: Three To Seven Days.
Underlying Stock: Bullish Market Edge Opinion – No Position.
Desired Stock Price Direction: Up.
Option Position: Short Expiring ATM Put – Long Expiring ATM -2 Put (Credit Spread) & Long Deferred ATM +2 Call.
Desired Result: The stock performs as anticipated. The short expiring put credit spread expires worthless and the long call gains additional premium.
Maximum Risk: Initial Put Credit Spread minus the Deferred Call Debit.
Quick Take: Blow Off Top – Bearish Trade
Time Frame: Three To Seven Days.
Underlying Stock: Bearish Market Edge Opinion – No Position.
Desired Stock Price Direction: Down.
Option Position: Short Expiring ATM Call – Long Expiring ATM +2 Call (Credit Spread) & Long Deferred ATM -2 Put.
Desired Result: The stock performs as anticipated. The short expiring call credit spread expires worthless and the long put gains additional premium.
Maximum Risk: Initial Call Credit Spread minus the Deferred Put Debit.
Current Blow Off Trades
| Market Edge – ‘Market Posture’ | Bullish | |||||||
| Blow Off Bottom Horizontal Trade (Bullish) | ||||||||
| Open | *Short-Exp | *Long-Exp | Put | Long-Def | Deferred | |||
| Open | Stock | ATM Put | ATM -2 Put | Spread | ATM +2 Call | Call | Max | |
| Stock | Date | Price | Strike Price | Strike Price | Credit | Strike Price | Debit | Loss |
| CVX | 09/03/18 | $118.96 | 119.0 | 118.0 | $0.40 | 120.0 | $1.00 | -$1.60 |
| Blow Off Top Horizontal Trade (Bearish) | ||||||||
| Open | *Short-Exp | *Long-Exp | Call | Long-Def | Deferred | |||
| Open | Stock | ATM Call | ATM +2 Call | Spread | ATM -2 Put | Put | Max | |
| Stock | Date | Price | Strike Price | Strike Price | Credit | Strike Price | Debit | Loss |
| UAL | 09/03/18 | $87.86 | 88.0 | 89.0 | $0.42 | 85.0 | $0.00 | -$0.58 |
| * Next to symbol indicates that the stock selection is in its second week so the defered call or put is the same. | ||||||||
| ** Selections are made on Monday, Tuesday & Wednesday and have spreads with Friday’s expiration. | ||||||||
Results For Previous Blow-Off Trades
| Blow Off Bottom Horizontal Trade (Bullish) | |||||||||||
| Open | Close | Open | Close | Open | Close | ||||||
| Open | Stock | Close | Stock | P/L | Spread | Spread | Call | Call | P/L | Weekly | |
| Stock | Date | Price | Date | Price | Stock | Credit | Debit | Debit | Credit | Trade | P/L |
| $0.00 | $0.00 | $0.00 | $0 | $0 | |||||||
| $0.00 | $0.00 | $0.00 | $0 | $0 | |||||||
| $0.00 | $0 | $0 | |||||||||
| $0.00 | $0 | $0 | |||||||||
| Profit/Loss Blow Off Bottom Trades: | $0 | ||||||||||
| Weekly % Return: | 0.0% | ||||||||||
| Blow Off Top Horizontal Trade (Bearish) | |||||||||||
| Open | Close | Open | Close | Open | Close | ||||||
| Open | Stock | Close | Stock | P/L | Spread | Spread | Put | Put | P/L | Weekly | |
| Stock | Date | Price | Date | Price | Stock | Credit | Debit | Debit | Credit | Trade | P/L |
| ILMN | 08/27/18 | $343.32 | 08/31/18 | $354.83 | -$11.51 | $1.12 | $2.50 | $4.00 | $0.40 | -$498 | -$498 |
| UAL | 08/28/18 | 86.82 | 08/31/18 | $87.42 | -$0.60 | $0.96 | $1.42 | $0.76 | $0.33 | -$89 | -$587 |
| $0 | -$587 | ||||||||||
| $0 | -$587 | ||||||||||
| # Of Trades: | 2 | ||||||||||
| Total Risk Capital: | $20,000 | ||||||||||
| Profit/Loss Blow Off Top Trades: | -$587 | ||||||||||
| Weekly % Return: | -2.9% | ||||||||||
| Total Profit/Loss: | -$587 | ||||||||||
| Total Weekly % Return: | -2.9% | ||||||||||
| Risk Capital-> | $20,000 | ||||||||||
| Win % | Loss % | % P/L | Annualized ROI | # Weeks | |||||||
| 36.0% | 64.0% | 0.6% | 6.4% | 5 | |||||||