IWO Trading Floor

Become a Great Options Trader

Proactive Spreads, December 3rd, 2020 – XLNX, SPG, SHOP

By

Not much has changed about the overall market structure. Unless we see proper price violations, we should consider the trend to be up.

There are some “hot spots” in the market right now– semiconductors and commodity stocks come to mind– so we may simply see a rotational correction. There is some risk right now as the PFE news came out about vacc*ne supply delays, yet if that doesn’t cascade over the next few trading days it should be fine.

(Yes, I am censoring the word, just so I make sure this email lands in your inbox properly.)

Overall, try not to overthink this market. My bet is that corrections will be limited to pockets of the market, and volatility will continue to head lower as we come into holiday trading.

Trade #1: XLNX

Very clean move over the past week, look for rotation lower as some other semiconductor companies take the lead. First dip in this stock should be a quality one.

Trade Setup

Expected Price: 136.59

Sell to Open XLNX 15Jan21 120/115 Put Spread

Tier 1: Enter at 0.94, Exit at 0.24

Tier 2: Enter at 1.316, Exit at 0.57

Tier 3: Enter at 1.692, Exit at 0.76

Stop Out If Close Under 119.89

Trade #2: SPG

If commercial real estate gets another whiff of good news, SPG will jam higher and (finally) fill the gap from March. Once it does, I want to fade it.

Trade Setup

Expected Price: 100

Sell to Open SPG 15Jan21 110/115 Call Spread

Tier 1: Enter at 1, Exit at 0.32

Tier 2: Enter at 1.4, Exit at 0.68

Tier 3: Enter at 1.8, Exit at 0.9

Stop Out If Close Over 110.11

Trade #3: SHOP

Got a lot of eyes on this one, looking to chase a breakout. My guess is we need one more washout before the big move comes, and I want to be prepared to play the dip into key levels.

Trade Setup

Expected Price: 1020.42

Sell to Open SHOP 18Dec20 975/970 Put Spread

Tier 1: Enter at 1.35, Exit at 0.72

Tier 2: Enter at 1.89, Exit at 1.26

Tier 3: Enter at 2.43, Exit at 1.71

Stop Out If Close Under 974.89

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