Quick Take: One Day Wonder – Bullish Trade
Time Frame: One Day.
Underlying Stock: Bullish Market Edge Opinion – No Stock Position.
Desired Stock Price Direction: Up.
Option Position: Long Deferred ATM -1or -2 Call – Short Expiring ATM +1 or +2 Call.
Maximum Risk: Initial debit spread amount.
Summary: The stock performs as anticipated. The premium (air) is the short expiring call goes to zero while the long deferred call gains additional premium.
Quick Take: One Day Wonder – Bearish Trade
Time Frame: One Day.
Underlying Stock: Bearish Market Edge Opinion – No Stock Position.
Desired Stock Price Direction: Down.
Option Position: Long Deferred ATM +1 or +2 Put – Short Expiring ATM -1 or -2 Put.
Maximum Risk: Initial debit spread amount.
Summary: The stock performs as anticipated. The premium (air) in the short expiring put goes to zero while the long deferred put gains additional premium.
This Week’s One-Day Wonder Trades
| Market Edge ‘Market Posture’ | Bullish | ||||||||
| Bullish – Off-Strike One-Day Wonder Horizontal Trade | Risk Capital | $20,000 | |||||||
| Market | Open | Short Call | Long Call | % | |||||
| Open | Edge | Stock | 11/01/19 | 11/08/19 | Debit | 100% | Max | Risk Capital | |
| Stock | Date | Opinion | Price | Strike Price | Strike Price | Spread | Target | Risk | Max Risk |
| NONE | 10/31/19 | Bullish | $0.00 | 0.0 | 0.0 | $0.00 | $0.00 | $0.00 | 0.0% |
| $0.00 | $0.00 | $0.00 | 0.0% | ||||||
| Bearish – Off-Strike One-Day Wonder Horizontal Trade | Risk Capital | $20,000 | |||||||
| Market | Open | Short Put | Long Put | % | |||||
| Open | Edge | Stock | 11/01/19 | 11/08/19 | Debit | 100% | Max | Risk Capital | |
| Stock | Date | Opinion | Price | Strike Price | Strike Price | Spread | Target | Risk | Max Risk |
| IBM | 10/31/19 | Bearish | $133.37 | 133.0 | 135.0 | $3.08 | $6.16 | $5.08 | 2.5% |
| $0.00 | $0.00 | 0.0% | |||||||
| Def Option = Next Friday’s Expiration Serial | |||||||||
| Exp Option = This Friday’s Expiration Serial | |||||||||
| Prices Are Thursday Afternoon’s Around 3:00 PM | |||||||||
Results for this week’s trades will be posted over the weekend on the Scoreboard.