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.
To participate in our live challenge and to access our online training, please click “Your Account” and upgrade to the “Live Trader” plan.
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