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.

What Can Happen At Expiration And What Action Should I Take?

  1. If Stock Closes At Or Above The Short Put Strike Price, Let The Spread Expire Worthless. Sell or Hold The ITM Call. (Profit)
  2. If Stock Closes Below The Short Put Strike Price, Close The Spread And Sell The ITM Call. (Possible Loss)

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.

What Can Happen At Expiration And What Action Should I Take?

  1. If Stock Closes At Or Below The Short Call Strike Price, Let The Spread Expire Worthless. Sell or Hold The ITM Put. (Profit)
  2. If Stock Closes Above The Short Call Strike Price, Close The Spread And Sell The ITM Put. (Possible Loss)

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

Bullish – Blow Off Bottom Trades Combined Risk Capital: $10,000
Short Exp Long Exp Long Def *Open
Market Open ATM Put ATM -2 Put ITM -1 Call Debit % Max Dollar
Open Edge Stock 04/25/25 04/25/25 05/03/25 Spread 100% Probability Risk Per Max Capital
Symbol Date Opinion Price Strike Price Strike Price Strike Price Cost Target Of Profit Spread % Risk
NONE 04/21/25 Bullish
*It should be noted that to avoid assignment on short option positions, it is recommended that you close all option spreads prior to the close on expiration day.
% Probability Of Profit: The % of the Spread returning at least $0.01 at the time of expiry.  This figure is derived from 30-day Implied Volatility.
Open Prices Are Monday’s Or Tuesday’s  Mid-Morning Prices
Bearish – Blow Off Top Trades Combined Risk Capital: $10,000
Short Exp Long Exp Long Def *Open
Market Open ATM Call ATM +2 Call ITM +1 Put Debit % Max Dollar
Open Edge Stock 04/25/25 04/25/25 05/03/25 Spread 100% Probability Risk Per Max Capital
Symbol Date Opinion Price Strike Price Strike Price Strike Price Cost Target Of Profit Spread % Risk
USO 04/21/25 Bearish $68.18 68.0 69.0 69.0 $1.76 $3.52 50.7% $276.00 2.8%
*It should be noted that to avoid assignment on short option positions, it is recommended that you close all option spreads prior to the close on expiration day.
% Probability Of Profit: The % of the Spread returning at least $0.01 at the time of expiry.  This figure is derived from 30-day Implied Volatility.
Open Prices Are Monday’s Or Tuesday’s  Mid-Morning Prices

 

Results for this week’s trades will be posted over the weekend on the Scoreboard. 

The information contained herein has been carefully compiled from sources believed to be reliable, but its accuracy is not guaranteed.  Past performance is not necessarily indicative of future results. Traders should read The Option Disclosure Statement before trading options. No representation is made that any account is likely to achieve profits or losses similar to those shown. Due to the possibility of human and/or mechanical error by The Optionomics Group LLC, Inc., its sources or others does not guarantee the accuracy, completion or availability of any information contained herein and is not responsible for any errors or omissions or for results obtained from the use of such information.