Quick Take: Bullish Put Credit Spread Trade
Short weekly expiring ATM put, long weekly expiring ATM -2 put.
- If Stock Closes At Or Above The Short Put SP. Let The Spread Expire Worthless (Profit)
- If Stock Closes Below The Short Put SP. Close The Spread (Possible Loss)
Time Frame: One Week.
Underlying Stock: Bullish Market Edge Opinion – No Stock Position.
Desired Stock Price Direction: Sideways to Up.
Option Position: Bullish Put Credit Spread.
Maximum Risk: The difference between the strike prices minus the credit spread.
Summary: If stock stays the same or moves up, the spread will expire worthless and you will keep the entire
credit. If the stock goes down big, you will lose the maximum risk amount. If the stock closes within the spread,
you will keep part of the spread.
Quick Take: Bearish Call Credit Spread Trade
Short weekly expiring ATM call, long weekly expiring ATM +2 call.
- If Stock Closes At Or Below The Short Put SP. Let The Spread Expire Worthless (Profit)
- If Stock Closes Above The Short Put SP. Close The Spread (Possible Loss)
Time Frame: One Week.
Underlying Stock: Bearish Market Edge Opinion – No Stock Position.
Desired Stock Price Direction: Sideways to Down.
Option Position: Bearish Call Credit Spread.
Maximum Risk: The difference between the strike prices minus the credit spread.
Summary: If stock stays the same or moves down, the spread will expire worthless and you will keep the
entire credit. If the stock goes up big, you will lose the maximum risk amount. If the stock closes within the
spread, you will keep part of the spread.
The following is a list of this week’s Bullish and Bearish Credit Spread Selections. The stocks are removed from the portfolio on the option’s expiration date.
This Week’s Basic Strategy: Bull – Bear Credit Spreads
Bull – Bear Credit Spread Plays, if any are posted on Monday and Tuesday around 11:00 AM EST.
| Market Edge ‘Market Posture’ | Neutral | ||||||||
| Bullish – Put Vertical Credit Spreads | Risk Capital | $20,000 | |||||||
| Open | Short Put | Long Put | % | ||||||
| Open | Stock | 10/30/20 | 10/30/20 | Credit | Max | % Of | Quick | Risk Capital | |
| Symbol | Date | Price | Strike Price | Strike Price | Spread | Risk | Spread | Target | Max Risk |
| CAT | 10/26/20 | $164.35 | 165.0 | 162.5 | $1.16 | $1.34 | 46.4% | $0.05 | -0.7% |
| JPM | 10/27/20 | $99.62 | 99.5 | 98.5 | $0.41 | $0.59 | 41.0% | $0.05 | -0.3% |
| GLD | 10/27/20 | 179.01 | 179.0 | 178.0 | $0.42 | $0.58 | 42.0% | $0.05 | -0.3% |
| Bearish – Call Vertical Credit Spreads | |||||||||
| Open | Short Call | Long Call | % | ||||||
| Open | Stock | 10/30/20 | 10/30/20 | Credit | Max | % Of | Quick | Risk Capital | |
| Symbol | Date | Price | Strike Price | Strike Price | Spread | Risk | Spread | Target | Max Risk |
| LULU | 10/26/20 | $330.79 | 330.0 | 332.5 | $1.20 | $1.30 | 48.0% | $0.05 | -0.7% |
| TLT | 10/27/20 | $160.37 | 160.0 | 161.0 | $0.51 | $0.49 | 51.0% | $0.05 | -0.3% |
| 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.