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
| Market Edge – ‘Market Posture’ | Neutral | ||||||||
| Blow Off Bottom Horizontal Trade (Bullish) | |||||||||
| Open | *Short-Exp | *Long-Exp | *Put | **Long-Def | **Deferred | ||||
| Open | Stock | ATM Put | ATM -2 Put | Spread | ATM +2 Call | Call | Max | ||
| Stock | Date | Price | Strike Price | Strike Price | Credit | Strike Price | Debit | Loss | Cost |
| CAT | 11/12/18 | $127.55 | 127.0 | 125.0 | $0.77 | 130.0 | $2.12 | -$3.35 | $1.35 |
| IWM | 11/12/18 | $152.30 | 152.5 | 151.0 | $0.54 | 154.0 | $1.67 | -$2.63 | $1.13 |
| Market Edge – ‘Market Posture’ | Neutral | ||||||||
| 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 | Cost |
| #VALUE! | $0.00 | ||||||||
| * Selections are made on Monday, Tuesday & Wednesday and have Exp spreads with Friday’s expiration. | |||||||||
| **Selections are made on Monday, Tuesday & Wednesday and have Def Put/Call positions with next Friday’s expiration. | |||||||||
| Track Record | |||||||||
| Risk Capital–> | $20,000 | ||||||||
| % | % Annualized | # Of | # Of | ||||||
| Win % | Loss % | P/L | P/L | Trades | Weeks | ||||
| 45.0% | 55.0% | -0.2% | -0.7% | 35 | 15 | ||||
Results For Previous Blow-Off Trades
| Blow Off Bottom Horizontal Trade (Bullish) | |||||||||||
| Open | Close | Open | Close | Open | Close | ||||||
| Open | Stock | Close | Stock | # Of | Spread | Spread | Call | Call | P/L | Weekly | |
| Stock | Date | Price | Date | Price | Spreads | Credit | Debit | Debit | Credit | Trade | P/L |
| MAR | 11/07/18 | $114.55 | 11/09/18 | $117.04 | 1 | $0.67 | $0.00 | $1.80 | $2.15 | $102 | $102 |
| $0 | $102 | ||||||||||
| $0 | $102 | ||||||||||
| $0 | $102 | ||||||||||
| Profit/Loss Blow Off Bottom Trades: | $102 | ||||||||||
| Weekly % Return: | 0.5% | ||||||||||
| Blow Off Top Horizontal Trade (Bearish) | |||||||||||
| Open | Close | Open | Close | Open | Close | ||||||
| Open | Stock | Close | Stock | # Of | Spread | Spread | Put | Put | P/L | Weekly | |
| Stock | Date | Price | Date | Price | Spreads | Credit | Debit | Debit | Credit | Trade | P/L |
| MCD | 11/12/18 | $182.29 | 11/09/18 | $185.94 | 1 | $0.81 | $2.50 | $1.52 | $0.32 | -$289 | -$289 |
| $0 | -$289 | ||||||||||
| $0 | -$289 | ||||||||||
| $0 | -$289 | ||||||||||
| Profit/Loss Blow Off Top Trades: | -$289 | ||||||||||
| Weekly % Return: | -1.4% | ||||||||||
| Total Risk Capital: | $20,000 | ||||||||||
| Total Profit/Loss: | -$187 | ||||||||||
| Total Weekly % Return: | -0.9% | ||||||||||
| Track Record | |||||||||||
| % | % Annualized | # Of | # Of | ||||||||
| Win % | Loss % | P/L | P/L | Trades | Weeks | ||||||
| 45.0% | 55.0% | -0.2% | -0.7% | 35 | 15 | ||||||