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’ | 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 |
| CVX | 02/07/19 | $118.06 | 118.0 | 116.0 | $0.45 | 116.0 | $2.15 | $1.70 | $3.40 | $0.85 |
| QQQ | 02/07/19 | $167.78 | 167.5 | 165.5 | $0.48 | 166.0 | $1.98 | $1.50 | $3.00 | $0.75 |
| 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 |
| BABA | 02/06/19 | $171.52 | 170.0 | 175.0 | $0.74 | 172.5 | $3.55 | $2.81 | $5.62 | $1.41 |
| * Selections are made on Monday, Tuesday & Wednesday and have Exp positions 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 | |||||
| 87.5% | 12.5% | 9.1% | 118.8% | 8 | 4 | |||||
Results for this week’s trades will be posted over the weekend on the Scoreboard.