Aug 2020: PYPL $190 – $195 Bull Call Spread
Stock
PYPL
Trade Structure
$190- $195 Bull Call Spread
Trade Date
08/13/2020
Price Paid
$250
Expiration Days
9/18/2020
THIS IS A DELAYED TRADE FOR EDUCATIONAL PURPOSES ONLY.
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Trade Rationale
This is a post earnings play. This is my typical post-earnings setup that you will find me trading all the time. It is characterized by a post-earnings spike, followed by a pullback. PYPL spiked up and kept going higher after earnings. Sometimes, this does happen and you don't get any opportunity to get in on a trade. However, PYPL did pullback to pre-earnings trading range/support level which gave us a great opportunity to get into a trade.
Trade Selection Criteria
Overall market movement
This is a post-earnings trade. My usual mean reversion parameters don’t apply here. These trades are based on Support/Resistance only
No Earnings or Significant News
Earnings are behind us and were announced on 7/29
Bollinger Bands outside Keltner Channels
This is a post earnings trade – our regular mean reversion indicators don’t apply here.
RSI Analysis
This is a post earnings trade – our regular mean reversion indicators don’t apply here.
ADX Analysis
This is a post earnings trade – our regular mean reversion indicators don’t apply here.
Trade Analysis
Due to a massive 14% correction in NASDAQ, most of the Sept trades went under-water. The account fluctuated all the way down from $6,800 ->$4,900 at one time. I recommended all my members to put on "Bail Out Trades" for Oct. Because of doing that, you can see that I am slowly approaching my $6,800 balance again. What are Bail Out trades? The second edition of the book is due out any time and I will be mentioning in the book how you can save your portfolio from Market corrections and Black Swan events. Stay tuned.
Trade Outcome
LOSER
Profit/Loss
$-250
Beginning Account Balance
$6,200
Ending Account Balance
$5,100
