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 ITM 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 ITM 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’ | Bullish | |||||||||
| Blow Off Bottom Horizontal Trade (Bullish) | ||||||||||
| Open | Short-Exp | Long-Exp | Open | Long-Def | Deferred | |||||
| Open | Stock | ATM Put | ATM -2 Put | Spread | ITM Call | Call | Total | 100% | 50% | |
| Stock | Date | Price | Strike Price | Strike Price | Credit | Strike Price | Debit | Cost | Target | Stop |
| AAPL | 01/14/19 | $150.08 | 150.0 | 148.0 | $0.81 | 146.0 | $5.83 | $5.02 | $10.04 | $2.51 |
| BIDU | 01/14/19 | $162.50 | 162.5 | 162.0 | $1.04 | 157.5 | $7.05 | $6.01 | $12.02 | $3.01 |
| Blow Off Top Horizontal Trade (Bearish) | ||||||||||
| Open | *Short-Exp | *Long-Exp | *Open | Long-Def | Deferred | |||||
| Open | Stock | ATM Call | ATM +2 Call | Spread | ITM Put | Put | Total | 100% | 50% | |
| Stock | Date | Price | Strike Price | Strike Price | Credit | Strike Price | Debit | Cost | Target | Stop |
| NONE | 01/07/19 | $0.00 | $0.00 | $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 this week’s trades will be posted over the weekend on the Scoreboard.