IWO Trading Floor

Become a Great Options Trader

Full Time Profits, September 2nd, 2021 – NFLX, QQQ, XBI

By

Markets hit a new all time high today, which is what tends to happen in a bull market.

(I keep needing to remind myself of this…)

Overall, things look fine. There’s the potential of a failed breakout from this candle, yet that is a little suspect.

The blue lines show the magnitude of the first rally in June, and then the same magnitude was overlaid on both the recent rallies. If we were to have the same energy pushed into stocks, that woudl take us to around 4600. That may seem unheard of, yet it’s only about 1.5% higher from here (I hope I did that math right…).

Our best bet is to focus on rotational bets, either planning pullbacks in leaders, looking for an index short into further upside as a hedge, and betting on an emerging sector into the end of the year.

That’s our theme today.

Trade #1: NFLX

Currently the strongest tech stock on my list. I’m looking for a shallow pullback to play, as we haven’t seen the full narrative flesh out behind this move, and we have institutions who will be looking for any dip to buy.

Trade Setup

Expected Price: 574.25

Sell to Open NFLX 15Oct21 540/535 Put Spread

Tier 1: Enter at 1.05, Exit at 0.37

Tier 2: Enter at 1.47, Exit at 0.76

Tier 3: Enter at 1.89, Exit at 1.01

Stop Out If Close Under 539.89

Trade #2: QQQ

 

Large cap tech has seen a nice extension away from the Jul-Aug correction, yet I think it’s starting to overheat just a bit. If we get one more push higher, I’ll be looking to start a fade.

Trade Setup

Expected Price: 386.01

Sell to Open QQQ 30Sep21 395/398 Call Spread

Tier 1: Enter at 0.64, Exit at 0.23

Tier 2: Enter at 0.896, Exit at 0.46

Tier 3: Enter at 1.152, Exit at 0.63

Stop Out If Close Over 395.11

Trade #3: XBI

This is the strongest momentum small cap biotech has had in a very long time. Look for one last retest of the previous range as a low-risk entry.

Trade Setup

Expected Price: 130.25

Sell to Open XBI 15Oct21 119/116 Put Spread

Tier 1: Enter at 0.47, Exit at 0.03

Tier 2: Enter at 0.658, Exit at 0.18

Tier 3: Enter at 0.846, Exit at 0.23

Stop Out If Close Under 118.89

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