IWO Trading Floor

Become a Great Options Trader

Full Time Profits, November 16th, 2018 – SBUX, PG, ADBE

By

After volatiltiy spikes, both to the upside and downside, the market will attempt to reach a new equillibrium where buyers and sellers can agree on price.

During aggressive selloffs, this leads to a whippy, volatile range with aggressive rallies and selloffs where there is no bid in sight.

Something of note- all major moving averages are clustered around each other, with plenty of moving average crosses that are going on and will continue. On multiple timeframes there are crosscurrents and confusion.

As it stands right now, there is no evidence to suggest any kind of trend, either higher or lower. Odds are, it’s going to be “garbage tape” with continued probes higher and lower until the market establishes a new kind of equillibrium. We’ve seen this before, go look at Jan-Mar of this year, Jan-Feb of 2016, Aug-Oct of 2015, and Fall of 2011.

Trade #1: SBUX

This is one name that is showing great relative strength. It had solid earnings and is hitting 52 week highs. I want to see a test of the post-earnings high to initiate a trade.

Trade Setup

Expected Price: 66

Sell to Open SBUX Jan 62.50/60 Put Spread

Tier 1: Enter at 0.45, Exit at 0.15

Tier 2: Enter at 0.60, Exit at 0.30

Tier 3: Enter at 0.75, Exit at 0.45

Trade #2: PG

Another relative strength play. Looking for a pullback to the most recent range and the rising 20 day moving average (in blue).

Trade Setup

Expected Price: 91.59

Sell to Open PG Jan 87.50/85 Put Spread

Tier 1: Enter at 0.45, Exit at 0.15

Tier 2: Enter at 0.60, Exit at 0.30

Tier 3: Enter at 0.75, Exit at 0.45

Trade #3: ADBE

ADBE is one of the last tech holdouts during this market selloff, and to me it looks to be holding on by a thread. The stock has tested this support level about 7 times, and the more times a support level is tested, the higher the odds of a breakdown.

I’m not sure my target will get hit, but I want to be prepared just in case tech takes another dump.

Trade Setup

Expected Price: 221

Sell to Open ADBE Jan 195/190 Put Spread

Tier 1: Enter at 0.95, Exit at 0.45

Tier 2: Enter at 1.25, Exit at 0.75

Tier 3: Enter at 1.55, Exit at 1.05

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