Monday saw a breakway gap with upside followthrough on some trade news. Or whatever the narrative is right now.
In fact, we don’t even need news for this market to run. The lack of news can be a catalyst in and of itself.
Markets are a big overbought, but this is starting to feel more “2017-ish” where any kind of correction is tiny… where we go weeks without a 1% drop in the markets.
Personally, I don’t want that to happen. I do better when volatility is up. When I can dip buy actual dips. Right now, we’re not getting that. I’ll be a little patient here, but if the market starts going in “run-away” mode, I’ll start to sell spreads more aggressively.
Trade #1: SQ
Looking for a shallow retracement here.
Expected Price: 76.63
Sell to Open SQ Oct 70/65 Put Spread
Tier 1: Enter at 0.95, Exit at 0.25
Tier 2: Enter at 1.35, Exit at 0.65
No Tier 3: We are widing out the profit potential on Tier 1 and 2, and will keep some dry powder to roll if needed.
Trade #2: WYNN
Looking for a gap fill to fade.
Expected Price: 160, If hit within the next 2 weeks
Sell to Open WYNN Oct 175/180 Call Spread
Tier 1: Enter at 0.75, Exit at 0.25
Tier 2: Enter at 1.05, Exit at 0.55
Tier 3: Enter at 1.35, Exit at 0.85
Trade #3: VMW
Anticipating the gap fill and a pull into the 200 day moving average.
Expected Price: 138
Sell to Open VMW Oct 130/125 Put Spread
Tier 1: Enter at 0.80, Exit at 0.30
Tier 2: Enter at 1.10, Exit at 0.60
Tier 3: Enter at 1.40, Exit at 0.90