Update: June 21st, 2019
Expiring worthless into Opex.
P/L: 43 Per Spread
RoC: 15%
DiT: 21
Become a Great Options Trader
By Steven Place
By Steven Place
After going straight up off the lows from December, the markets are finally seeing a decent pullback. 2800 is the key level, and if we see that level retaken within the next 5 days it indicates a failed breakdown and a high odds that we will retest the highs.
If that doesn’t happen, then we are probably due for a multi-month trading range, which started back in March. The March pivot low is a reasonable expectation of support, as well as the 2700 level that was the 50% range back from the high volatility range from last quarter. This selloff feels more like a slow bleed compared to what we saw late last year, so unless that changes, I expect reversion and range to be more likely than the straight up/straight down moves we’ve been seeing.
The stock had a large move on earnings and is pulling back to support, as well as the rising 50 day moving average. I like playing it here and scaling into any attempts at a gap fill.
Trade Setup
Expected Price: 37
Sell to Open TWTR Jul 33/30 Put Spread
Tier 1: Enter at 0.39, Exit at 0.09
Tier 2: Enter at 0.59, Exit at 0.29
Tier 3: Enter at 0.79, Exit at 0.49
NKE broke under key support on an earnings move. When you see a strong selloff on earnings, there is a tendency to overshoot the lows with a momentum divergence, which is what I’m looking for.
Trade Setup
Expected Price: 77
Sell to Open NKE Jul 72.50/70 Put Spread
Tier 1: Enter at 0.37, Exit at 0.12
Tier 2: Enter at 0.52, Exit at 0.27
Tier 3: Enter at 0.67, Exit at 0.42
Looking for the gap fill here.
Trade Setup
Expected Price: 180
Sell to Open GS Jul 165/160 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
By Steven Place
The overall structure of the market favors the upside.
There tends to be an internal logic at key levels. At places where the market “should” pivot. That doesn’t mean it has to pivot, but if it does, it shows that the internal logic is holding.
The SPX pulled back to 2800. That was massive resistance at the end of last year, and for bullish structure to continue, it needed to hold. And it did.
The market bounced where it was “supposed” to bounce.
Now we need to think in terms of time. The longer the market goes on holding that 2800 level, the higher the odds we will break to new highs and run to 3000. I’ve talked for months about the massive amount of cash on sidelines, and any dip is being put to work… that evidence is shown in the 2800 dip buy.
This is a catalyst continuation trade. The stock ran from 120 to 140 on news of their live streaming service. It’s been rangebound, and the only selling happened around earnings, and even that failed to bring in profit takers. Any failure lower in a stock like this tends to lead to moves higher.
Trade Setup
Expected Price: 134
Sell to Open DIS Jul 125/120 Put Spread
Tier 1: Enter at 0.60, Exit at 0.10
Tier 2: Enter at 0.90, Exit at 0.40
Tier 3: Enter at 1.20, Exit at 0.70
Been watching for this gap to fill to get involved. Now some news comes out about a ruling that goes against them and the stock is trading back to the 70s.
Trade Setup
Expected Price: 70
In terms of fills, I’m not sure because the market hasn’t opened yet and I don’t know what prices are available.
I’ll be doing 2.5 wide spreads, and my initial price to come in around 0.30. I think it will be the Jul 62.50/60 Put Spread
Looking for a 50% retracement and a test of the Feb-Mar pivot highs.
Trade Setup
Expected Price: 177.75
Sell to Open AAPL Jul 160/155 Put Spread
Tier 1: Enter at 0.70, Exit at 0.20
Tier 2: Enter at 1.00, Exit at 0.50
Tier 3: Enter at 1.30, Exit at 0.80
By Steven Place
By Steven Place
By Steven Place