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?
- If Stock Closes At Or Above The Short Put Strike Price, Let The Spread Expire Worthless. Sell or Hold The ITM Call. (Profit)
- 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?
- If Stock Closes At Or Below The Short Call Strike Price, Let The Spread Expire Worthless. Sell or Hold The ITM Put. (Profit)
- 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
| Combined Risk Capital: | $10,000 | ||||||||||
| Bullish – Blow Off Bottom Trades | |||||||||||
| Short Exp | Long Exp | Long Def | *Open | ||||||||
| Market | Open | ATM Put | ATM -2 Put | ITM -1 Call | Debit | % | |||||
| Open | Edge | Stock | 11/15/24 | 11/15/24 | 11/18/24 | Spread | 100% | Probability | Max Dollar | Max Capital | |
| Symbol | Date | Opinion | Price | Strike Price | Strike Price | Strike Price | Cost | Target | Of Profit | Risk | % Risk |
| NONE | 11/11/24 | Bullish | |||||||||
| Bearish – Blow Off Top Trades | |||||||||||
| Short Exp | Long Exp | Long Def | *Open | ||||||||
| Market | Open | ATM Call | ATM +2 Call | ITM +1 Put | Debit | % | |||||
| Open | Edge | Stock | 11/15/24 | 11/15/24 | 11/22/24 | Spread | 100% | Probability | Max Dollar | Max Capital | |
| Symbol | Date | Opinion | Price | Strike Price | Strike Price | Strike Price | Cost | Target | Of Profit | Risk | % Risk |
| LOW | 11/11/24 | Bearish | $275.57 | 275.0 | 280.0 | 277.50 | $6.03 | $12.06 | 52.6% | $11.03 | 11.0% |
| % 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.