IWO Trading Floor

Become a Great Options Trader

Full Time Profits, July 16th, 2020 – GLD, COST, ADBE

By

The churn underneath the surface is quite a sight.

Tech earnings are up on deck soon, so you’re seeing profit taking in the FANG stocks. On the other side, banks are ripping post-earnings, effectively creating a “wash” as the market goes sideways.

This is fairly constructive price action. Tech could have a few more “rug pulls” as company earnings come in, but as it stands this is fairly vanilla price action.

Key level for SPX is 3125, the longer we hold above that level the higher the odds we see continuation. Couple that with the fact that all the major moving averages are in bullish alignment and we’re still set up for trend continuation.

If (and when) the markets get too stretched then we will start looking at short-biased trades, but we simply are not there yet. We will focus on selling premium to the long side.

Trade #1: GLD

After a solid breakout to new highs, GLD ran from 165 to the low 170s. Odds are it will just continue here, but I want to be prepared if we see a decent dip. There is a gap fill and a rising 20 day moving average at 167.50, so if we come into that level I wan to be involved.

Trade Setup

Expected Price: 167.6

Sell to Open GLD 7Aug20 165/162 Put Spread

Tier 1: Enter at 0.5, Exit at 0.2

Tier 2: Enter at 0.7, Exit at 0.3

Tier 3: Enter at 0.9, Exit at 0.37

Stop Out If Close Under 162.89

Trade #2: COST

After clearing to new highs, the stock isn’t seeing much followthrough… maybe it’s time for it to dip a little further. I want to be involved in that gap fill.

Trade Setup

Expected Price: 317.2

Sell to Open COST 21Aug20 300/295 Put Spread

Tier 1: Enter at 0.85, Exit at 0.35

Tier 2: Enter at 1.19, Exit at 0.54

Tier 3: Enter at 1.53, Exit at 0.66

Stop Out If Close Under 299.89

Trade #3: ADBE

With the selloff last week, the stock has probably topped in the short term. THere is a massive level around 380 that I think will hold… in fact I think the stock will hold higher levels than that and start to create a trading range. We are “close enough” to initiate a new position.

Trade Setup

Expected Price: 421.83

Sell to Open ADBE 21Aug20 375/370 Put Spread

Tier 1: Enter at 0.65, Exit at 0.12

Tier 2: Enter at 0.91, Exit at 0.21

Tier 3: Enter at 1.17, Exit at 0.21

Stop Out If Close Under 374.89

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