The Blow Off Trades – The Week Of -10-22-18

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’				Bearish
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
GS	10/24/18	$216.44	215.0	210.0	$1.20	220.0	$2.35	$6.15
Market Edge – ‘Market Posture’				Bearish
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
NONE	10/24/18							$0.00
*  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

The results for this week will be posted over the upcoming weekend.