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 Put | Long Put | Long Call | ||||||
| Open | Stock | 06/07/19 | 06/07/19 | Spread | 06/14/19 | Long Call | Total | 100% | |
| Stock | Date | Price | Strike Price | Strike Price | Credit | Strike Price | Debit | Cost | Target |
| FDX | 06/03/19 | $151.25 | 152.5 | 150.0 | $1.19 | 147.0 | $6.35 | $5.16 | $10.32 |
| $0.00 | $0.00 | $0.00 | |||||||
| Blow Off Top Horizontal Trade (Bearish) | |||||||||
| Open | Short Call | Long Call | Long Put | ||||||
| Open | Stock | 06/07/19 | 06/07/19 | Spread | 06/14/19 | Long Put | Total | 100% | |
| Stock | Date | Price | Strike Price | Strike Price | Credit | Strike Price | Debit | Cost | Target |
| UNH | 06/05/19 | $244.80 | 245.0 | 247.5 | $1.00 | 250.0 | $7.40 | $6.40 | $12.80 |
| $0.00 | $0.00 | ||||||||
Results for this week’s trades will be posted over the weekend on the Scoreboard.