IWO Trading Floor

Become a Great Options Trader

Full Time Profits, October 12th, 2021 – ICE, COP, SMH

By

Markets are still a choppy mess right now. We’ve got potential changes in Fed policy due to “transitory” economic data, a ramp up in crude and natural gas, the debt ceiling/infrastructure, and the Chinese Evergrande situation that everyone thinks is contained. Oh, and earnings.

In other words, just another week in the markets.

We will most likely stay choppy for a while as we continue to shake out the weak hands. It’s very possible that this is a longer term topping pattern, yet we won’t know how strong the odds are on that until we get more data and price action. I currently view the S&P as roughly a coin flip here, with not much of an edge on a daily chart. So right now we will focus on playing pullbacks in two strong stocks, and picking a fade level in the Semiconductor sector.

Trade #1: ICE

Clean multi-week breakout for ICE. This is probably related to the uptick in trade activity in commodities. This setup will have earnings risk, yet this stock doesn’t have a tendency for massive moves. That said, we’ll focus on December options for this one to give more wiggle room through earnings.

Trade Setup

Expected Price: 123.3

Sell to Open ICE 17Dec21 115/110 Put Spread

Tier 1: Enter at 0.75, Exit at 0.02

Tier 2: Enter at 1.05, Exit at 0.26

Tier 3: Enter at 1.35, Exit at 0.32

Stop Out If Close Under 114.89

Trade #2: COP

Conoco is running hot on the back of solid moves in oil and gas. I’m looking for the first pullback from this breakout for a fresh entry.

Earnings is in this cycle, so again we will focus on Dec options.

Trade Setup

Expected Price: 67.33

Sell to Open COP 17Dec21 62.5/60 Put Spread

Tier 1: Enter at 0.65, Exit at 0.33

Tier 2: Enter at 0.91, Exit at 0.59

Tier 3: Enter at 1.17, Exit at 0.79

Stop Out If Close Under 62.39

Trade #3: SMH

This is a “wishful thinking” trade where if we get a break under the 200 day moving average, we can see a swift move to the middle of the trading range.

Trade Setup

Expected Price: 240

Sell to Open SMH 19Nov21 220/215 Put Spread

Tier 1: Enter at 0.75, Exit at 0.02

Tier 2: Enter at 1.05, Exit at 0.26

Tier 3: Enter at 1.35, Exit at 0.32

Stop Out If Close Under 219.89

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