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.
This Week’s Blow Off Top-Bottom Trades
Blow Off Trades, if any are posted on Monday, Tuesday and Wednesday around 11:00 AM EST
| Market Edge – ‘Market Posture’ | Neutral | ||||||||
| Bullish – Blow Off Bottom Horizontal Trades | Risk Capital | $20,000 | |||||||
| Combo | Combo | Combo | Total | ||||||
| Open | Short Put | Long Put | Long Call | Combo | % | ||||
| Open | Stock | 12/13/19 | 12/13/19 | 12/20/19 | Spread | 100% | Max | Risk Capital | |
| Stock | Date | Price | Strike Price | Strike Price | Strike Price | Cost | Target | Risk | Max Risk |
| NONE | 12/09/19 | $0.00 | 0.0 | 0.0 | 0.0 | $0.00 | $0.00 | $0.00 | 0.0% |
| 0.0 | 0.0 | 0.0 | $0.00 | $0.00 | $0.00 | 0.0% | |||
| $0.00 | $0.00 | 0.0% | |||||||
| Bearish – Blow Off Top Horizontal Trades | |||||||||
| Combo | Combo | Combo | Total | ||||||
| Open | Short Call | Long Call | Long Put | Combo | % | ||||
| Open | Stock | 12/13/19 | 12/13/19 | 12/20/19 | Spread | 100% | Max | Risk Capital | |
| Stock | Date | Price | Strike Price | Strike Price | Strike Price | Cost | Target | Risk | Max Risk |
| JPM | 12/09/19 | $134.97 | 135.0 | 137.0 | 138.0 | $2.71 | $5.42 | $4.71 | 2.4% |
| QQQ | 12/10/19 | $204.62 | 204.5 | 206.5 | 207.5 | $2.60 | $5.20 | $4.60 | 2.3% |
| $0.00 | $0.00 | 0.0% | |||||||
Results for this week’s trades will be posted over the weekend on the Scoreboard.