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 | 07/26/19 | 07/26/19 | Spread | 08/02/19 | Long Call | Total | 100% | Max | Risk Capital | |
| Stock | Date | Price | Strike Price | Strike Price | Credit | Strike Price | Debit | Cost | Target | Risk | Max Risk |
| NONE | 07/23/19 | $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 | 07/26/19 | 07/26/19 | Spread | 08/02/19 | Long Put | Total | 100% | Max | Risk Capital | |
| Stock | Date | Price | Strike Price | Strike Price | Credit | Strike Price | Debit | Cost | Target | Risk | Max Risk |
| FB | 07/23/19 | $201.82 | 200.0 | 202.5 | $1.27 | 205.0 | $8.55 | $7.28 | $14.56 | $9.78 | -3.6% |
| MSFT | 07/23/19 | $139.00 | 139.0 | 141.0 | $0.90 | 142.0 | $3.70 | $2.80 | $5.60 | $4.80 | -1.4% |
| JPM | 07/24/19 | $116.36 | 116.0 | 118.0 | $0.76 | 118.0 | $2.08 | $1.32 | $2.64 | $3.32 | -0.7% |
Results for this week’s trades will be posted over the weekend on the Scoreboard.