Update: October 5th, 2018
Closing out the trade for a profit.
Become a Great Options Trader
By Steven Place
By Steven Place
By Steven Place
The month-long correction has clearly resolved higher. The correction was incredibly benign, there was no follow-through, and it was very rotational.
We’re probably due for a pull in here. The market is above its upper bollinger band for two days in a row. AGAIN – that’s not calling for the end of western capitalism… just that with our trade setups being primarily pullback setups, we will most likely need the market to “exhale” to get into new positions.
After a GREAT earnings report and reaction, the stock is getting hit hard. I like a test of the recent range support as an entry.
Trade Setup
Expected Price: 60.58
Sell to Open JWN Oct 57.50/55 Put Spread
Tier 1: Enter at 0.40, Exit at 0.15
Tier 2: Enter at 0.65, Exit at 0.30
Tier 3: Enter at 0.80, Exit at 0.55
CAT bottomed on that test sub 130, and has since seen an easy 25 point move higher. It’s overbought, and honestly if it jams into 160 you can probably get a good short play there.
The easier play is to look for the gap fill to act as support.
Trade Setup
Expected Price: 152.77
Sell to Open CAT Nov 140/135 Put Spread
Tier 1: Enter at 0.79, Exit at 0.29
Tier 2: Enter at 1.09, Exit at 0.59
Tier 3: Enter at 1.39, Exit at 0.89
By Steven Place
By Steven Place
By Steven Place
Today we’re starting with a look at the QQQ – Nasdaq – because that seems to be where the narrative is currently taking hold.
Markets are putting in lower highs and testing last week’s support. There’s also a trendline broken as well as the rising 50 day moving average that is currently being tested. Any further weakness and we could see a baby top form.
Yes, baby top. Super technical term. All that means is that the duration and magnitude of the recent distribution isn’t that great. We haven’t even seen a proper correction since June.
It’s a dip in the markets. Fine. We’ve been preparing for this, identifying high quality pullback setups and anticipating any selling into those levels. That’s the whole philosophy behind being Proactive with your trading.
We had some good success on this trade back in July, and I’m looking to get involved again on a retest of the lower end of the trading range.
Trade Setup
Expected Price: 113.61
Sell to Open IBB Oct 110/105 Put Spread
Tier 1: Enter at 0.85, Exit at 0.35
Tier 2: Enter at 1.15, Exit at 0.65
Tier 3: Enter at 1.45, Exit at 0.95
Potential double top. The height of the double top is 6.38, so the measured move takes it down to the low 81’s, which coincides with the rising 200 day moving average and post-earnings price support. This probably won’t get hit but I want to be ready if it does.
Trade Setup
Expected Price: 81.16
Sell to Open PYPL Oct 75/72.50 Put Spread
Tier 1: Enter at 0.40, Exit at 0.15
Tier 2: Enter at 0.55, Exit at 0.30
Tier 3: Enter at 0.75, Exit at 0.45