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.
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.
Current Blow Off Trades
| Market Edge – ‘Market Posture’ | Bearish | ||||||||
| 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 | Total | |
| Stock | Date | Price | Strike Price | Strike Price | Credit | Strike Price | Debit | Loss | Cost |
| CVX | 11/26/18 | $114.44 | 114.0 | 112.0 | $0.67 | 117.0 | $1.23 | -$2.56 | $0.56 |
| $0.00 | $0.00 | ||||||||
| Market Edge – ‘Market Posture’ | Bearish | ||||||||
| 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 | Total | |
| Stock | Date | Price | Strike Price | Strike Price | Credit | Strike Price | Debit | Loss | Cost |
| BABA | 11/26/18 | $155.00 | 155.0 | 157.5 | $1.18 | 150.0 | $3.05 | -$4.37 | $1.87 |
| 0.0 | 0.0 | $0.00 | $0.00 | $0.00 | $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 | ||||
| 50.0% | 50.0% | -3.0% | -9.3% | 38 | 17 | ||||
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 |
| NVDA | 11/19/18 | $153.77 | 11/23/18 | $145.00 | 1 | $2.17 | $5.00 | $3.30 | $0.55 | -$558 | -$558 |
| CAT | 11/20/18 | $123.75 | 11/23/18 | $122.32 | 1 | $0.88 | $1.68 | $2.66 | $1.54 | -$192 | -$750 |
| UTX | 11/20/18 | $125.80 | 11/23/18 | $129.04 | 1 | $0.75 | $0.00 | $1.86 | $3.10 | $199 | -$551 |
| Profit/Loss Blow Off Bottom Trades: | -$551 | ||||||||||
| Weekly % Return: | -2.8% | ||||||||||
| 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 |
| NONE | $0 | $0 | |||||||||
| $0 | $0 | ||||||||||
| $0 | $0 | ||||||||||
| Profit/Loss Blow Off Top Trades: | $0 | ||||||||||
| Weekly % Return: | 0.0% | ||||||||||
| # Of Trades: | 3 | ||||||||||
| Total Risk Capital: | $20,000 | ||||||||||
| Total Profit/Loss: | -$551 | ||||||||||
| Total Weekly % Return: | -2.8% | ||||||||||