Quick Take: Blow Off Bottom – Bullish Trade
Time Frame: Three To Seven Days.
Underlying Stock: Bullish Market Edge Opinion – No Stock Position.
Desired Stock Price Direction: Up.
Option Position: Short Expiring ATM Put – Long Expiring ATM -2 Put (Bullish Put Credit Spread) & Long Deferred ATM +2 Call.
Maximum Risk: Initial Put Credit Spread minus the Deferred Call Debit.
Summary: The stock performs as anticipated. The short expiring put spread expires worthless and the long deferred call gains additional premium.
Quick Take: Blow Off Top – Bearish Trade
Time Frame: Three To Seven Days.
Underlying Stock: Bearish Market Edge Opinion – No Stock Position.
Desired Stock Price Direction: Down.
Option Position: Short Expiring ATM Call – Long Expiring ATM +2 Call (Bearish Call Credit Spread) & Long Deferred ATM -2 Put.
Maximum Risk: Initial Call Credit Spread minus the Deferred Put Debit.
Summary: The stock performs as anticipated. The short expiring call spread expires worthless and the long deferred put gains additional premium.
Current Blow Off Trades
| Market Edge – ‘Market Posture’ | Bullish | ||||||||
| Blow Off Bottom Horizontal Trade (Bullish) | |||||||||
| Open | Short Put | Long Put | Long Call | ||||||
| Open | Stock | 04/26/19 | 04/26/19 | Spread | 05/03/19 | Long Call | Total | 100% | |
| Stock | Date | Price | Strike Price | Strike Price | Credit | Strike Price | Debit | Cost | Target |
| IBM | 04/22/19 | $139.35 | 139.0 | 137.0 | $0.55 | 137.0 | $3.15 | $2.60 | $5.20 |
| $0.00 | $0.00 | ||||||||
| Blow Off Top Horizontal Trade (Bearish) | |||||||||
| Open | Short Call | Long Call | Long Put | ||||||
| Open | Stock | 04/26/19 | 04/26/19 | Spread | 05/03/19 | Long Put | Total | 100% | |
| Stock | Date | Price | Strike Price | Strike Price | Credit | Strike Price | Debit | Cost | Target |
| CAT | 04/22/19 | $142.50 | 142.0 | 144.0 | $1.00 | 145.0 | $5.25 | $4.25 | $8.50 |
| DIS | 04/24/19 | $133.78 | 134.0 | 136.0 | $0.63 | 137.0 | $3.55 | $2.92 | $5.84 |
Results for this week’s trades will be posted over the weekend on the Scoreboard.