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Simple compression breakout setup. Confirmation occurrs on a hold above 81.
The October 80 call is a good buy on that breakout, with a worst case stop under 76.
The breakout worked very well and the stock reached new 52 week highs.
To take some profits off the table and reduce risk, consider a technique called “spreading”
This is where you take your long call, and then sell a new call at a higher strike price. This moves your trade from a long call to a bull call spread.
Before (on 5 contracts)
After – by selling the Oct 85 call against:
This reduced delta, increases theta, and reduces max reward. From here, if ILMN pulls back, you can close out the short calls for a profit and then keep the long calls on.
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