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 |
| AAPL | 01/07/19 | $147.27 | 148.0 | 146.0 | $0.90 | 149.0 | $3.10 | -$4.20 | $2.20 |
| UNH | 01/07/19 | $238.90 | 240.0 | 235.0 | $2.15 | 242.5 | $4.25 | -$7.10 | $2.10 |
| 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 |
| NONE | 01/07/19 | $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. | |||||||||
Results For Previous Blow-Off Trades
The results for this week will be posted over the upcoming weekend.