IWO Trading Floor

Become a Great Options Trader

Proactive Spreads, November 11th, 2019 – TLT, GOOGL, MS

By

I think it’s reasonable to plan for a pullback.

Yes, we’re breaking to new all time highs. That’s not bearish, never will be.

But it’s been a while. It’s OK for the market to exhale, maybe retest some of the levels created over the past few weeks. And maybe we’ll see some rotation out of the hot money stocks which will give us buyable entries.

The huge level to watch is 3023. That’s the breakout level and the first successful retest that we saw from Oct 31. If the market manages to selloff under that and hold under it, then we’ve got a failed breakout… but I think that’s unlikely. Instead, pullbacks will be shallow or potentially a sideways drift. The buying pressure into the end of the year is just too strong.

Trade #1: TLT

Out of the 75 other reasons the market is breaking out, the bond selloff is helping. Investors are bailing on treasuries and buying stocks. TLT is now 4% under its 50 day moving average, which is a pretty good stretch under, given the fact that the long term trend is up.

Trade Setup

Expected Price: 134.88

Sell to Open TLT Jan 129/126 Put Spread

Tier 1: Enter at 0.41, Exit at 0.11

Tier 2: Enter at 0.61, Exit at 0.21

Tier 3: Enter at 0.81, Exit at 0.31

Trade #2: GOOGL

Looking for a retest of the rising 20 day moving average and the October gap fill.

Trade Setup

Expected Price: 1276.11

Sell to Open GOOGL Jan 1140/1130 Put Spread

Tier 1: Enter at 0.80, Exit at 0.30

Tier 2: Enter at 1.10, Exit at 0.40

Tier 3: Enter at 1.40, Exit at 0.50

Trade #3: MS

I want to see a full gap fill from the move higher 2 weeks ago.

Trade Setup

Expected Price: 47.33

Sell to Open MS Jan 44/41 Put Spread

Tier 1: Enter at 0.42, Exit at 0.12

Tier 2: Enter at 0.62, Exit at 0.22

Tier 3: Enter at 0.82, Exit at 0.32

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