IWO Trading Floor

Become a Great Options Trader

Full Time Profits, July 31st, 2020 – UPS, GDX, WORK

By

Today we’re starting with a look at the Nasdaq 100 index. Which is basically the Nasdaq 5 index, as 5 stocks make up about half of the market cap.

A few of those stocks reported earnings today— AAPL, AMZN, and FB. They all reported solid numbers, saw strong moves premarket, and aggressive fades as it becomes a “sell the news” event.

This is now our risk proxy. The longer QQQ hangs out in this range, the higher the odds of continuation. yet if it takes out 250 and holds under it into the first bounce, then it will be a distinct change in character with the sector that led us higher.

It’s possible we see a multimonth correction that is rotational in nature– where tech takes a break and other sectors (industrials, commodities) play catch up.

If big cap tech dips into next week, we’ll look at fading that, but right now we will look at areas that offer the best risk/reward.

Trade #1: UPS

UPS reported monster numbers, and the stock jammed into 140. I expect the breakout to hold as it was related to earnings, and for the stock to drift higher over the next few months.

Trade Setup

Expected Price: 141.28

Sell to Open UPS 21Aug20 133/130 Put Spread

Tier 1: Enter at 0.43, Exit at 0.05

Tier 2: Enter at 0.602, Exit at 0.12

Tier 3: Enter at 0.774, Exit at 0.14

Stop Out If Close Under 132.89

Trade #2: GDX

GDX has seen a strong move on the 37 breakout, and hasn’t really seen a proper pullback since. I want to be involved, but need to see a push lower before it offers good risk/reward. The gap up on Monday failed and if sellers take it into 40, then I’ll pull the trigger.

Trade Setup

Expected Price: 40.05

Sell to Open GDX 21Aug20 38/36 Put Spread

Tier 1: Enter at 0.43, Exit at 0.16

Tier 2: Enter at 0.602, Exit at 0.322

Tier 3: Enter at 0.774, Exit at 0.424

Stop Out If Close Under 37.89

Trade #3: WORK

WORK has seen a solid multi-day pullback and is finding support. Look for the breakdown to fail and for the stock to reclaim the multimonth trading range it’s seen.

Trade Setup

Expected Price: 28.95

Sell to Open WORK 21Aug20 27/25 Put Spread

Tier 1: Enter at 0.45, Exit at 0.18

Tier 2: Enter at 0.63, Exit at 0.35

Tier 3: Enter at 0.81, Exit at 0.47

Stop Out If Close Under 26.89

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