IWO Trading Floor

Become a Great Options Trader

Proactive Spreads, April 5th, 2018 - LULU, NVDA

By

Markets are bouncing off oversold conditions, and while we didn't properly retest the low, it's a "close enough" for me.

The base case remains the same-- the market is attempting to knock out a new, multimonth trading range that we'll probably stay in for a while.

Right now you should be peeling off existing trades and getting setup for new opportunities. I don't think it makes sense to short here-- too early, but if we get a squeeze in the next week we'll look to initiate some index call spreads.

Trade #1: LULU

Great breakout, this is a multi-year breakout and I expect this trend to continue. Retail as a whole have seen some leaders pop up, and I want to be involved into pullbacks.

Trade Setup

Expected Price: 91

Sell to Open LULU May 82.50/80 Put Spread

Tier 1: Enter at 0.35, Exit at 0.05

Tier 2: Enter at 0.50, Exit at 0.25

Tier 3: Enter at 0.65, Exit at 0.40

Trade #2: NVDA

NVDA is catching some heat because of Citron... they used to move markets but they've been early and wrong on this one for a while.

In case we do manage to get a flush I want to be prepared.

Trade Setup

Expected Price: 202

Sell to Open NVDA May 170/165 Put Spread

Tier 1: Enter at 0.80, Exit at 0.30

Tier 2: Enter at 1.10, Exit at 0.60

Tier 3: Enter at 1.40, Exit at 0.90

Disclaimer

U.S. GOVERNMENT REQUIRED DISCLAIMER - COMMODITY FUTURES TRADING COMMISSION. FUTURES AND OPTIONS TRADING HAS LARGE POTENTIAL REWARDS, BUT ALSO LARGE POTENTIAL RISK. YOU MUST BE AWARE OF THE RISKS AND BE WILLING TO ACCEPT THEM IN ORDER TO INVEST IN THE FUTURES AND OPTIONS MARKETS. DON'T TRADE WITH MONEY YOU CAN'T AFFORD TO LOSE. THIS WEBSITE IS NEITHER A SOLICITATION NOR AN OFFER TO BUY/SELL FUTURES OR OPTIONS. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE DISCUSSED ON THIS WEBSITE. THE PAST PERFORMANCE OF ANY TRADING SYSTEM OR METHODOLOGY IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. CFTC RULE 4.41 - HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY, SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN