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 – Thursday
One-Day Wonder Trades, if any are posted on Thursday around 3:00 AM EST.
| Market Edge ‘Market Posture’ | Bullish | ||||||||
| Bullish – One-Day Wonder Horizontal Trade | Risk Capital | $20,000 | |||||||
| Market | Open | Short | Long | Open | % | ||||
| Open | Edge | Stock | 02/21/20 | 02/28/20 | Debit | 100% | Max | Risk Capital | |
| Stock | Date | Opinion | Price | Exp. Call | Def. Call | Spread | Target | Risk | Max Risk |
| CVX | 02/20/20 | Bullish | $110.13 | 110.0 | 108.0 | $2.07 | $4.14 | $2.07 | 1.0% |
| CAT | 02/20/20 | Bullish | $137.41 | 137.0 | 135.0 | $2.40 | $4.80 | $2.40 | 1.2% |
| Bearish -One-Day Wonder Horizontal Trade | |||||||||
| Market | Open | Short | Long | Open | % | ||||
| Open | Edge | Stock | 02/21/20 | 02/28/20 | Debit | 100% | Max | Risk Capital | |
| Stock | Date | Opinion | Price | Exp. Put | Def. Put | Spread | Target | Risk | Max Risk |
| BABA | 02/20/20 | Bearish | $218.48 | 217.5 | 220.0 | $3.46 | $6.92 | $3.46 | 1.7% |
| $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.