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 | ||||||||||
| Bullish – Blow Off Bottom Horizontal Trades | Risk Capital | $20,000 | |||||||||
| Open | Short Put | Long Put | Long Call | % | |||||||
| Open | Stock | 07/12/19 | 07/12/19 | Spread | 07/19/19 | Long Call | Total | 100% | Max | Risk Capital | |
| Stock | Date | Price | Strike Price | Strike Price | Credit | Strike Price | Debit | Cost | Target | Risk | Max Risk |
| NONE | 07/08/19 | $0.00 | $0.00 | $0.00 | 0.0% | ||||||
| $0.00 | $0.00 | $0.00 | 0.0% | ||||||||
| $0.00 | $0.00 | $0.00 | 0.0% | ||||||||
| Bearish – Blow Off Top Horizontal Trades | |||||||||||
| Open | Short Call | Long Call | Long Put | % | |||||||
| Open | Stock | 07/12/19 | 07/12/19 | Spread | 07/19/19 | Long Put | Total | 100% | Max | Risk Capital | |
| Stock | Date | Price | Strike Price | Strike Price | Credit | Strike Price | Debit | Cost | Target | Risk | Max Risk |
| JNJ | 07/08/19 | $140.69 | 140.0 | 142.0 | $1.00 | 143.0 | $3.15 | $2.15 | $4.30 | $4.15 | -1.1% |
| PG | 07/08/19 | $113.75 | 113.0 | 115.0 | $0.98 | 115.0 | $2.31 | $1.33 | $2.66 | $3.33 | -0.7% |
| $0.00 | $0.00 | $0.00 | 0.0% | ||||||||
Results for this week’s trades will be posted over the weekend on the Scoreboard.