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.
This Week’s Blow Off Top-Bottom Trades
Blow Off Trades, if any are posted on Monday, Tuesday and Wednesday around 11:00 AM EST
| Market Edge – ‘Market Posture’ | Neutral | ||||||||
| Bullish – Blow Off Bottom Horizontal Trades | Risk Capital | $20,000 | |||||||
| Combo | Combo | Combo | Total | ||||||
| Open | Short Put | Long Put | Long Call | Combo | % | ||||
| Open | Stock | 11/15/19 | 11/15/19 | 11/22/19 | Spread | 100% | Max | Risk Capital | |
| Stock | Date | Price | Strike Price | Strike Price | Strike Price | Cost | Target | Risk | Max Risk |
| NONE | 11/25/19 | $0.00 | 0.0 | 0.0 | 0.0 | $0.00 | $0.00 | $0.00 | 0.0% |
| NONE | 11/26/19 | $0.00 | 0.0 | 0.0 | 0.0 | $0.00 | $0.00 | $0.00 | 0.0% |
| $0.00 | $0.00 | 0.0% | |||||||
| Bearish – Blow Off Top Horizontal Trades | |||||||||
| Combo | Combo | Combo | Total | ||||||
| Open | Short Call | Long Call | Long Put | Combo | % | ||||
| Open | Stock | 11/29/19 | 11/29/19 | 12/06/19 | Spread | 100% | Max | Risk Capital | |
| Stock | Date | Price | Strike Price | Strike Price | Strike Price | Cost | Target | Risk | Max Risk |
| BABA | 11/25/19 | $190.13 | 190.0 | 192.5 | 195.0 | $5.22 | $10.44 | $7.72 | 3.9% |
| NVDA | 11/25/19 | $220.34 | 220.0 | 222.5 | 225.0 | $6.38 | $12.76 | $8.88 | 4.4% |
| MAR | 11/25/19 | $137.81 | 138.0 | 140.0 | 140.0 | $2.23 | $4.46 | $4.23 | 2.1% |
| IWM | 11/26/19 | $162.26 | 162.0 | 163.5 | 166.0 | $3.22 | $6.44 | $4.72 | 2.4% |
| LULU | 11/26/19 | $221.82 | 222.5 | 225.0 | 230.0 | $7.40 | $14.80 | $9.90 | 5.0% |
Results for this week’s trades will be posted over the weekend on the Scoreboard.