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
| 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 |
| NKE | 09/11/18 | $83.42 | 83.5 | 85.0 | $0.34 | 82.5 | $0.86 | -$2.02 |
| JNJ | 09/11/18 | $138.68 | 139.0 | 141.0 | $0.58 | 137.0 | $0.75 | -$2.17 |
Results For Previous Blow-Off Trades
The results for this week will be posted over the upcoming weekend.