REAL OPTIONS TRADES EXAMPLES
The trading method introduced in my book has the capability of generating outsized returns under the right market conditions. I do these personal challenges in my own account every now and then to demonstrate how effective this trading method is. I call these challenges the 25K Challenge where I attempt to grow my own account by 1000%. If markets co-operate, I am able to accomplish this anywhere between 9 months – 2 years. I have put together a list of real trades from my own accounts in order to give you an insight into my trading style.
A SAMPLE $25K Challenge
I have also documented in an infographic what journey a 25K Challenge goes through whenever I do these in my accounts.
Beginning NET LIQ (Mar 2020)
Ending NET LIQ (Jan 2022)
$30,000 (Target Acquired on 12/8)
|NOV 2021||Starting Value: $23,800||Ending Value: 24,000|
October is behind us and after enjoying a massive rally, the markets have pulled back quite a bit. I was hoping to wrap up the challenge before Nov ends, but it appears it will overflow into December. Stay tuned as I am very close to my target...
Nov 2021: DIA $350 – $351 Bull Call Spread
Markets gapped down big on this day due to a massive knee-jerk reaction on Omicron news. As I have explained earlier, whenever I can lay my hands on ETF like SPY, QQQ, DIA, IWM I prefer them over stocks. These tickers represent the overall market and in a Bull Market, we always get a recovery whether it is a correction or a knee-jerk reaction like this. The only tricky part is that these trades are hard to come by (maybe once in 2-3 months), so whenever they do show up, I make sure that I grab these trades as they always turn out to be winners. You do have to take multiple contracts of these spreads depending on your risk tolerance. I have seen members in our group take anywhere from 6 to 200 contracts of these spreads in their accounts.
Nov 2021: COIN $325- $330 Bull Call Spread
NOV 2021: COIN $325-$330 Call Spread – This is the first trade I have taken on COIN after its IPO. As a general rule, I don’t trade IPO stocks as I am a big advocate of trading stocks with well established trading patterns and some trading history. I have also mentioned in my book that learning the price movement of the stocks in my watchlist by observing them on a daily basis is what makes me see trading opportunities. I only use indicators to confirm my already existing bias for a trade. But the trade idea itself does not come from any fancy indicators or scans but by simply staying in touch with the “personality” of the stocks in my watchlist. I am a computer programmer and creating an indicator or scan is the easiest thing for me, but you will never see me promoting automation when it comes to finding trade ideas. I am just old-school that way.
COIN is a simple mean reversion trade where DI- is curving down after shooting up initially. This is followed by RSI also pointing up. Both of these indicate that the price wants to move up. You will find many examples of these trades in my book too.
Nov 2021: MRNA $225- $230 Bull Call Spread
NOV 2021: MRNA $225- $230 Call Spread – MRNA had a gigantic drop of nearly 40% in a matter of 2 days. This was triggered by Pfizer’s good news and exacerbated further by Moderna’s own supply/chain issues and the fact that their vaccine won’t be approved for teens before the year end. Although this is a lot of bad news, a 40% sell-off is a little overdone and unwarranted in my opinion. RSI has plunged into oversold territory and a bounce is overdue.
Nov 2021: NOC $355- $360 Bull Call Spread
NOV 2021: NOC $355- $360 – NOC had a monster gap down on missed earnings followed by analyst downgrades. My whole trading philosophy revolves around mean-reversion and this includes taking advantage of any kind of market over-reaction. With NOC, the downward pressure started losing momentum as indicated by the shrinking red candles, DI- changing direction and RSI flattening out. The trade has relady started going in my direction and is beginning to look good. PS: For any new members, I am never trying to catch the bottom with my trades and you will find that 90% of my trades initially go against me after putting them on. This is the reason why you will see me reminding our group not to jump at trade alerts the moment you see them. Patiently waiting for a few hours or even a day will give you some really good entries. I recommend that you keep a trade log for 2 weeks and track what happens to a stock after I push out a trade alert and see for yourself if waiting would be more rewarding or not. In this particular case, NOC fell down to $349 before recovering.
|OCT 2021||Starting Value: $19,400||Ending Value: $23,800|
The Markets had a dramatic recovery from the September sell-off. A key part of my trading method is to constantly adjust portfolio exposure based on what the Markets are doing. This means shrinking portfolio allocations when markets peak and expanding allocations when markets sell-off. During September, I stretched my portfolio to 40%-50% range and was handsomely rewarded the entire October with back to back weeks with almost 100% winning trades.
Oct 2021: FB $325- $330 Bull Call Spread
OCT 2021: FB $325- $330 FB, GOOG and other social media ad-related companies had a nasty gap down on 10/21 when SNAP announced a huge earnings miss blaming it all on loss of ad-revenue due to IOS 14 privacy related changes. FB did beat eps estimates a few days later and I put this trade based on support around $325. But it kept dropping all the way down to $310 before recovering. The recent reorg and Meta news has turned the tables in our favor and this trade looks pretty decent at this point. Congrats to those who were able to get the trade at lower strikes!
Oct 2021: NFLX $620 – $625 Bull Call Spread
OCT 2021: NFLX $620 – $625 Bull Call Spread – NFLX had blow out earnings, but the stock was slightly under pressure the next day. With most of the earnings trades, you will find some level of judgement and experience coming into play. On any trade that I take right on the day of earnings, it will always come down to watching the price action on that day. I watch the daily candle and see signs of stabilizing before taking these trades. A solid red candle is usually a sign of danger and it is best to wait for another day on those trades. A candle which starts looking like a DOJI with a small body and long wicks are the best indicators of downward pressure dying off. But there is a lot more art than any science to this. You just need to keep watching and learning to develop your own feel for these trades.
Oct 2021: IBM $125 – $130 Bull Call Spread
OCT 2021: IBM $125 – $130 Bull Call Spread – Look at the long nasty red candle that appeared after IBM announced their earnings. This is an example of where I wait a day before entering a trade. If you know anything about price/action, a red full bodied candle represents a ton of selling pressure. The next day a DOJI like candle appeared in addition to DI- and RSI all flattening out which prompted me to take this trade.
Oct 2021: SI $135 – $140 Bull Call Spread
OCT 2021: SI $135 – $140 Bull Call Spread – With most of the earnings trades, you will find some level of judgement and experience coming into play. On any trade that I take right on the day of earnings, it will always come down to watching the price action on that day. I watch the daily candle and see signs of stabilizing before taking these trades. A solid red candle is usually a sign of danger and it is best to wait for another day on those trades. A candle which starts looking like a DOJI with a small body and long wicks are the best indicators of downward pressure dying off. But there is a lot more art than any science to this. You just need to keep watching and learning to develop your own feel for these trades.
Oct 2021: OKTA $230 – $235 Bull Call Spread
OCT 2021: OKTA $230 – $235 Bull Call Spread – As we were coming out of the September correction, I started taking a few $1 wide spreads to test the waters. I did try a couple of $5 wide spreads in addition to the $1 wides as well. OKTA is one of them. OKTA enjoys support around the $230 area and I took this trade purely based on that. Friday was a red day and the stock slipped a couple of dollars after that, but next week’s action in the Nasdaq will decide the fate of this trade.
Oct 2021: ARKK $111 – $112 Bull Call Spread
OCT 2021: ARKK $111- $112 Bull Call Spread – Cathy Wood’s ARKK has been beaten down badly this year and stands at a -11% return YTD. It broke support earlier this year at 115 and if it shoots past 115, it is setting up for a nice reversal. However, anything below 115 is going to be tricky. Watch this trade carefully and if you see ARKK dipping below 109 anytime during this trade’s window, you would want to close this trade out as the next stop is most likely 102 for ARKK.
|SEP 2021||Starting Value: $18,500||Ending Value: $16,500|
Welcome to SeptemBEAR!! We had a brutal September correction. When corrections happen, I expect to have drawdowns and I had a 11% drawdown in my account. But the acid test for any trading method is a correction. Do you get wiped out or do you come back out of it with a vengeance. You will see by October end, what happened ....so stay tuned. For now, enjoy the sadistic pleasure of going through the losing trades
Sep 2021: QQQ $368 – $369 Bull Call Spread
SEP 2021: QQQ $368 – $369 Bull Call Spread – Once in a couple of months you get these amazing mean reversion opportunities on Index/ETFs like SPY,QQQ,DIA. In the last decade, not even once did I have a losing trade on these opportunities. I guess if somebody wanted to be a passive trader, they could just wait for these moments and put on these trades when they show up. But for you to spot these trades, you will need to be engaged with the market. If you become too passive and stop trading for a few months only to get into these trades, you won’t even know when a sell-off is happening and even if you do come to hear about it, you will not know what levels are right for you to get into a trade. Also, these opportunities may not present themselves for several months at a time.
The beauty of these trades is that they have $1 wide strikes available. You can risk as little as $50 and there is no limit to increase your exposure. Simply add more contracts to increase exposure! All 3 of these are textbookish mean reversion trades, so I will not go into further detail. You have all the mean reversion indicators in agreement. RSI coming out of oversold zone, DI- and DI+ both changing direction.
Sep 2021: NVDA $210 – $215Bull Call Spread
SEP 2021: NVDA $210-$215 Bull Call Spread – I have posted a very detailed trade mentioning how I handle corrections on V (Visa) yesterday. Please read that as many trades taken during that time frame have similar rationales. I haven’t traded NVDA much this year, but got a nice opportunity during this sell-off. At the time I took this trade, DI- and DI+ were both sharply changing direction. RSI never really touched oversold but was also sharply turning upwards.
Sep 2021: V $220 – $225 Bull Call Spread
SEP 2021: V $220-$225 Bull Call Spread – Corrections come without warnings and can happen all of a sudden. By the time you realize what happened, you are already in the middle of it and it is usually too late to start taking Bearish postions at this time. A critical piece of the $25K Trading method is that we save 70% cash in our portfolio at all times. When markets are peaking, we further reduce our allocations and sometimes even go to 80% – 90% cash at times. September correction is a perfect example of how this works out. I always tell our members to do whatever it takes to keep that winners > losers equation in play for all expirations. But when corrections happen, you will see 2-4 weeks of trades going underwater. This is the time when you need to deploy your saved cash and take advantage of the correction. Our group put on several trades during the deepest part of the correction and as of today both my accounts have recovered any losses that I had during September.
Sep 2021: FIVE $185 – $190 Bull Call Spread
SEP 2021: FIVE $185 – $190 FIVE beat on eps estimates but was slightly below revenue estimates. They also refused to give full year guidance due to COVID uncertainty. This caused a massive and uncalled for drop in the price. Extreme market reactions mean opportunities for me. I waited for the price to stabilize and got in on the next day when I saw the first green bar followed by other indicators confirming my directional bias.
Sep 2021: MSTR $645 – $650 Bull Call Spread
SEP 2021: MSTR $645-$650 Bull Call Spread – MSTR as a company is looking solid. It has a better 1 year return than Wells Fargo, Facebook, Disney and Amazon. The stock is also not for the faint-hearted as it is a huge mover and can go up or down $30 – $50 in a single day on literally no news. I entered this trade after seeing it stabilize after the recent sell-off. RSI and DI- were both pointing towards a mean-reversion trade. But MSTR is heavily dependent on Bitcoin’s price movement as they are a huge investor in Bitcoin (They hold $3 Billion worth of Bitcoin). Watch Bitcoin in the coming week as the performance of this trade will be closely correlated to it.
Sep 2021: BNTX $330 – $335 Bull Call Spread
SEP 2021: BNTX $330 – $335 Bull Call Spread – BNTX had a massive pre-earnings run up and as is common with these situations the stock usually gives way to profit taking even if it is an earnings beat. The stock has been stabilizing around $330 support ever since. RSI is flattening out and DI- is also flat which indicates that the downward momentum has lost its legs. The stock hasn’t really turned around in our favor yet so it is a waiting game at this point.
Sep 2021: MRNA $370 – $375 Bull Call Spread
SEP 2021: MRNA 370-375 Bull Call Spread – MRNA like other pharma stocks is a very volatile stock. After an eps beat it initially shot up from $400 to almost $500 in a matter of 3 days. As is common with these kind of sudden moves, the stock usually pulls back due to profit taking. MRNA did pull back and then started going sideways stabilizing in a range between $365 and $405. I took this trade somewhere towards the lower end of the trading range. It seems to be popping out of this sideways movement to the upside and looks like a pretty good trade at the moment.
|AUG 2021||Starting Value: $16,000||Ending Value: $18,500|
After a not such a good July, August came as a breath of fresh air. I got a lot of winners this month and the winning streak continues. I closed the month at $16,600 and opened on Sept 1st at $17,300. If this trend continues, the finish line doesn't seem too far from here.
AUG 2021: GPN $165- $170 Bull Call Spread
AUG 2021: GPN 165-170 Bull Call Spread – I have been watching GPN ever since it crashed even after an earnings beat. But it doesn’t offer weekly expirations so when it gave an opportunity on 8/5 I didn’t take it as the only expiration available was 9/17 which was too far (we were filling up 9/10 expiration at that time). I entered this trade when we got a second opportunity on 8/12. The stock is already trading at 171, so things are looking decent at this point.
AUG 2021: CI $200 – $205 Bull Call Spread
AUG 2021: CI 200-205 Bull Call Spread – For post-earnings trades, I try to post the stock symbols and any entry levels that look appealing before the market opens in our private Discord group. I do this so that you know in advance what trades I am considering. However, it is impossible to gauge correct strikes until after the market opens. CI had already fallen down quite a bit before even the market opened and I had posted 215-220 as a potential entry level in my morning announcement. However, these post-earnings trades which I take on the next day after earnings do require some judgement. CI kept dropping after the market opened and I waited for that nasty red candle to stabilize a little before entering this trade. Also not that the nearest support is around $200. I usually just watch the daily candle on my 3M-daily chart for these kinds of trade setups, but you could switch to a 5-min daily chart if you want more granularity. I am used to spotting these trade setups, so I don’t feel the need to switch to smaller time frames.
AUG 2021: EXAS $105 – $110 Bull Call Spread
AUG 2021: EXAS 105-110 Bull Call Spread – EXAS dropped on an earnings miss and I took this trade based on support around 105. Based on how this chart looks like, it seems to want to fall further. The next support is around $90. So watch out for this one of it keeps dipping. Don’t forget the 50% loss rule and go back and read the #case-studies on Discord (paid members only) when in doubt.
AUG 2021: BDX $240 – $245 Bull Call Spread
AUG 2021: BDX $240 – $245 Bull Call Spread – This is a very simple trade setup. BDX had a big gap down even after an earnings beat and I entered this trade after watching the price/action stabilize around the support level at 238-240ish. BDX seems to be recovering at this point, but hasn’t picked a clear direction yet.
|JUL 2021||Starting Value: $15,100||Ending Value: $16,000|
July has been a mixed bag so far. With Markets at all time highs, it is very difficult to find trade setups. Add earnings season to the mix and it makes things even worse. I have been dabbling with some Put Spread this month too since a pullback or correction is imminent at this time but nobody knows when it will happen.
JUL 2021: XBI $120 – $125 Bull Call Spread
JUL 2021: XBI $120 – $125 Bull Call Spread – Due to earnings season, it was very hard to find good trades the whole of July. I picked this Biotech ETF because every other stock in my watchlist had earnings coming up. This trade was picked based on the support level at $125. XBI briefly dipped below support which allowed me to enter the 120-125 spread. XBI is also trading at the bottom of its trading range, so even if it bounces back to support from here, this will become a winner.
JUL 2021: UPS $190- $195 Bull Call Spread
JUL 2021: UPS $190 – $195 Bull Call Spread – Another good earnings, followed by profit taking. I took this trade based on the support level at $195. There is a gap down below at $175 though, but just because there is a gap doesn’t mean it will fill. Plus, UPS had good earnings and RSI is already in the oversold zone. Unless a broader market sell-off ensues, UPS should start turning back in the next few days.
JUL 2021: WDAY $225- $230 Bull Call Spread
JUL 2021: WDAY $225-$230 Bull Call Spread – A picture-perfect mean reversion trade! You will find these trades documented in my book too. All our mean reversion indicators are in place with this trade. DI- turning down, DI+ turning up, RSI turning up, plus the stock bouncing at support. A green candle after a DOJI. Literally every single box can be checked on this trade. These picture perfect trades don’t show up often, but they do come around every now and then.
JUL 2021: ZM $400 – $395 Bear Put Spread
JUL 2021: ZM $400 – $395 Bear Put Spread – PUT spreads are very hard to trade in Bullish markets. Plus, these are short term (2 week) trades with low success rates. You have to be very diligent in making sure when to take these trades on. I usually wait for confirmation from many of my indicators before taking the trade and use a lot of judgement, but even then the short term trend can go against me and destroy the trade. In ZM’s case, all mean reversion indicators as shown below are lining up and ZM did take a beating and looks like a winner at this time. However, if we get green markets next week, this could pop right back up, so we will need to keep a close eye on it.
JUL 2021: DOCU $290- $285 Bear Put Spread
JUL 2021: DOCU $290-$285 Bear Put Spread – DOCU went parabolic after beating earnings. I took this trade after seeing signs of exhaustion as indicated in the chart below. However, it needs to be seen how this trade reacts next week. It all depends on the markets in general. Green markets will test all our put spreads. 1 or 2 red days will turn all of these profitable.
|JUN 2021||Starting Value: $11,500||Ending Value: $15,100|
June has shown some recovery and is being reflected in my accounts. We had a nasty sell-off in DOW Jones just in the week of 6/14 and that gave our group many opportunities to add on trades. Nasdaq has been at all time highs, so all new trades are pretty much focused on Health, Finance, Industrials, Consumer Discretionary etc. Stay tuned for trades in June as soon as the month closes out.
JUN 2021: MMM $190 – $195 Bull Call Spread
JUN 2021: MMM $190 – $195 Bull Call Spread – Here is a simple mean reversion trade. The chart is not a perfect text book trade, but those perfect setups are rare anyway. That is where judgement/experience comes into play. Most of the mean-reversion indicators are all in place. DI- had started turning down starting 6/18 and RSI also bounced back up after being in oversold territory. As far as the price action is concerned, the downward momentum seems to have stopped and the stock is now going sideways with intermittent green days showing up every now and then since 6/18.
JUN 2021: MDB $360 – $365 Bull Call Spread
JUN 2021: MDB $360 – $365 Bull Call Spread – MDB has been very strong recently and suddenly gapped down on 6/20 after they announced a secondary stock offering. Although a stock offering does dilute shares, I took this trade based on an exaggerated market reaction (gap-down) on a strong stock. The stock did fall a little further before recovering and is now trading at $362.
JUN 2021: URI $300 – $310 Bull Call Spread
JUN 2021: URI $300 – $310 Bull Call Spread – I took this trade after seeing multiple signs of a mean reversion coming into play as indicated in the chart below. However, the broader market sell off caused URI to further dip down to $285.
JUN 2021: AMGN $232.5 – $237.5 Bull Call Spread
JUN 2021: AMGN $232.5 – $237.5 Bull Call Spread – This is a very simple mean-reversion trade. A massive red candle on 6/1 on literally no news caught my attention. There is clear support around 232 and DI- had been pointing down for a few days. When I took this trade, RSI hadn’t caught up yet, but is confirming my directional bias now as well.
JUN 2021: ADSK $272.5 – $277.5 Bull Call Spread
JUN 2021: ADSK $272.5-$77.5 Bull Call Spread – After a comfortable earnings beat, the stock has been selling off due to profit taking and I had been waiting for an opportunity to show up on ADSK. Strong support lies at $275 and $267. I entered this trade based on the support around $275. RSI and ADX were not confirming my bias when I put on this trade, but you can clearly see now that all our indicators are confirming my directional bias at this point.
JUN 2021: BDX $235-$240 Bull Call Spread
JUN 2021: BDX $235-$240 Bull Call Spread – BDX has been stuck in a squeeze ever since its earnings came out. You can clearly see it chopping up and down between $238 and $248 at this time. I entered this trade at the lower end of the trading range, which means I just need it to stay at or above $240, even if it doesn’t break out of the squeeze by expiration.
|MAY 2021||Starting Value: $11,100||Ending Value: $11,500|
May has been a very choppy month. Just when we were almost done recovering from the massive correction in March, May shows up with another meltdown in Nasdaq. Nasdaq sold off brutally for the first 20 days in May, pretty giving up all its gains that were made in April. You can see this clearly reflected in my account. The value is flat or just slightly above where I started out this month.
MAY 2021: ALGN $597.5-$602.5 Bull Call Spread
MAY 2021: ALGN $597.5 – $602.5 Bull Call Spread – Even after a comfortable earnings beat, ALGN dropped like a rock and I entered this trade a little too early based on the support at 597. ALGN pierced through 2 support levels and dropped all the way down to 560 before bouncing back up. Although, ADX and RSI were not agreeing with me at the time I put on this trade (and I ignore them for post-earnings trade anyway esp. If I take these trades within 1-3 days of earnings), now they are clearly showing signs of a mean reversion in our favor.
MAY 2021: CRSP $110-$115 Bull Call Spread
MAY 2021: CRSP $110-$115 Bull Call Spread – CRSP has been selling off since 4/27 after an earnings miss and I had been waiting for it to get down to the support at $112. This trade is really simple and my reasoning is just based on the support at $112. CRSP did blow past support and still hasn’t recovered yet, so it needs to be seen how it behaves next week as there is no clear direction yet.
MAY 2021: FB $315-$320 Bull Call Spread
MAY 2021: FB $315-$320 Bull Call Spread – Why do you think I am Bullish on Nasdaq? Every single tech giant has beat earnings this season. FB gapped up to $331 after a comfortable earnings beat. When it gave up its gains due to profit taking last week due to the Nasdaq sell-off, it gave me a beautiful opportunity to enter a trade at the gap fill level. We need Nasdaq to behave next week and all these tech trades will shape up nicely for us.
MAY 2021: AAPL $125-$130 Bull Call Spread
MAY 2021: AAPL $125-$130 Bull Call Spread – AAPL affects Nasdaq so much that if you compare QQQ and AAPL chart, they look identical at this point. After a nice earnings beat, AAPL rocketed up to $136 and I had originally thought that I will not get a chance to put a trade. But with last week’s sell off, AAPL dropped to a nice support level of $127, allowing me to enter this trade. It has already recovered since then and is looking pretty good at this point.
MAY 2021: MRNA $140-$145 Bull Call Spread
MAY 2021: MRNA $140-$145 Bull Call Spread – This is one of those outliers where the stock instantaneously takes off in my direction after putting on my trade. Trust me, I don’t have any skills to catch bottoms. This is pure luck at play here. If you have been with me in our private group, you will notice that with mean reversion trading, most of my trades go against me for a few days before they start to recover and head in my direction. I got into this trade after using the same reasoning as I do with all my other trades, but MRNA just took off in my direction within seconds. I am not even sure if anybody else got into this trade with me.
|APR 2021||Starting Value: $9,975||Ending Value: $11,100|
After a massive 12% correction in Nasdaq which lasted 1.5 months, we are finally on the road to recovery. A lot of things happened in the past month in our private trading group.
Many of you know that I am doing a $250K challenge in my own account starting from last year's left-over $25K. The bigger challenge account is now net positive and is at 444% gains since last April. The smaller $25K account which I document here for informational purposes is still affected and is down 15% from Feb highs. But sitll net positive for this year with 350% gains since last April.
The trading discipline I teach in our group, allows you to survive these corrections. If you follow the rules and discipline, the only thing that you lose during these tough times is time. But you can resume trading as soon as things become normal and get back on track.
APR 2021: LMT $370-$375 Bull Call Spread
APR 2021: LMT $370-$375 Bull Call Spread – Sometimes, I know well in advance what levels I am looking at before taking a trade. In all those cases, I post the levels as announcements in our group ahead of time. LMT was one of those cases. After an earnings beat, LMT sold off due to profit taking and I entered this trade based on 370 as the level of support,
APR 2021: AMGN $230-$235 Bull Call Spread
APR 2021: AMGN $230-$235 Bull Call Spread – Did I catch the bottom of this one? It clearly seems I did. But as much as I would like to flaunt my mind-blowing clairvoyant capabilities, the truth is that I just got lucky on this one. AMGN gapped down big on an earnings miss and I entered this trade after seeing signs of the downward momentum coming to an end. This is clearly evident by DI- sharply turning down, DI+ sharply turning up and RSI flattening out at oversold levels.
APR 2021: UPST $100-$105 Bull Call Spread
APR 2021: UPST $100 – $105 Bull Call Spread – UPST gapped up to $165 on an earnings beat before giving up its gains and is now consolidating around support which lies around $102. Although, next support is all the way down to $80, but I don’t see any reason for the stock to drop further than this at this point. And if markets stay stable, we should see a bounce back up from here in the coming week.
APR 2021: ABNB $170 – $175 Bull Call Spread
APR 2021: ABNB $170 – $175 Bull Call Spread – ABNB IPOd last December and I trade stocks which have some kind of trading pattern in place, so have been avoiding it so far. After 5 months post IPO, ABNB has a decent trading pattern in place and I got into this trade after seeing ABNB drop to its support level at $170ish. Although, it appears that the stock is now entering a squeeze/consolidation, but we still have a nice trading range available between $170 – $195 even inside this squeeze.
APR 2021: STZ $220 – $225 Bull Call Spread
APR 2021: STZ $220 – $225 Bull Call Spread – We just closed a profitable 215 -220 Call Spread on STZ just 2 days ago to avoid earnings. And here we are again with a new one. Despite an earnings beat, STZ gapped down due to lowered guidance for the next quarter. You can see that STZ has good support at approx. 219 – 220 level, which is where I entered this trade. I was also trying for 217.5 – 222.5 spread on Thursday but couldn’t get filled. STZ pulled back further on Friday and I believe some of our members did get the lower spread. Irrespective of that, STZ ended up closing at $224.15. All we are asking for is that it stays at or above $225 and we will make our money on this trade.
The markets are looking very strong right now and it appears that Nasdaq is going for an all time high next week. If this is the case, you should see STZ continue to move up.
|MAR 2021||Starting Value: $12,800||Ending Value: $9,975|
The entire month of March, we were busy taking necessary steps to deal with the massive correction that we experienced in Nasdaq. I have detailed the steps in my book on how to handle these corrections using the concept called "Bailout Trades". Refer to the book for further details. If you are part of our paid membership, you must have literally experienced how to deal with corrections live in our group.
MAR 2021: DOCU $200- $205 Bull Call Spread
MAR 2021: DOCU $200 – $205 Bull Call Spread – DOCU pulled back after an earnings beat and I entered the spread here around the $200 support level. Because Nasdaq has been pulling back consistently, all stocks are getting affected by it. DOCU did pull back to $190 level before turning back around. I take all these trades based on clear and well documented rules that I am very transparent about. But, we do need Nasdaq to stabilize a little for all these trades to work out.
MAR 2021: QQQ $310 – $315Bull Call Spread
MAR 2021: QQQ $310 – $245315 Bull Call Spread – QQQ is very hard to fill. As you can see below I had been trying for a $310-$315 spread since 2/23 and although QQQ had flirted with $310 levels, I never got filled. Finally, when it dropped down to $307 is when I got filled for a $310-$315 spread. I can only attribute it to a spike in IV. QQQ has very solid support at $310, but it did get pulled back all the way $296 before bouncing back up slightly. I am guessing some of our members were lucky to get $300-$305 spreads too.
MAR 2021: TSLA $610 – $620 Bull Call Spread
MAR 2021: TSLA $610 – $620 Bull Call Spread – I have hardly been trading TSLA this year. For my trading style, I need stocks which have well established trading patterns. But TSLA is such a cult stock, all it does is go up. In addition to that, it is a huge mover. It can go up or down $150 in a day on literally no material news. (Maybe tweets hold more value than material news these days. The CEO of a company is buying Twitter founder Jack Dorsey’s first tweet for $2.5 million!) But due to this broader sell-off in the market, TSLA got pulled back with every single stock in our watchlist. I entered this trade based on the support which lies around $600ish. TSLA did drop down to the $500s after that, but is again flirting with $600 levels at this point. Overall, whether you got in at $575 or $610, it doesn’t matter. If we get a recovery in the market, TSLA will be trading above $700 in a matter of 7-10 days.
MAR 2021: WDAY $240 – $250 Bull Call Spread
MAR 2021: WDAY $240 – $250 Bull Call Spread – WDAY got brutally punished even after an earnings beat (The reason why I treat earnings as gambling and don’t trade earnings). But the market sell off really dragged it down beyond multiple support levels. I entered WDAY around $240, but it did drop to $222 before recovering and closed on Friday around $237. As with all these trades, what we are looking at right now is not the individual stock but the overall market to recover. Whether the individual stocks we trade are doing good or not has become completely irrelevant at this point.
MAR 2021: SQ $240 – $245 Bull Call Spread
MAR 2021: SQ $240 – $245 Bull Call Spread – SQ initially shot up from $247 to $261 on an earnings beat. However, it got dragged down with the market in the subsequent days. I took this trade on a support level which exists around $242ish. But the stock continued to fall after that giving many of our traders better entry points. If you missed this trade, it can be a good trade for next week.
MAR 2021: TGT $172.5 – $177.5 Bull Call Spread
MAR 2021: TGT $172.5 – $177.5 Bull Call Spread – Massive red candle on an earnings beat? Another reason why I don’t put trades on when earnings are coming up. TGT was got pulled down with the market and I entered the 172.15 – 177.5 spread when TGT was around 174. I did this based on the clear support at $175ish level. TGT got pulled further down as the entire market was in a free fall, and has recovered since.
MAR 2021: ARKK $110 – $115 Bull Call Spread
MAR 2021: ARKK $110 – $115 Bull Call Spread – I have been eyeing Cathy Wood’s ARKK for a while. It’s performance follows Nasdaq closely. But it fell down 30% from its peak on 2/22 and has presented multiple opportunities to enter into trades. There is a clear support at $110, which is where I entered this trade. As long as Nasdaq stays healthy and QQQ stays above $320 level, this trade is going to be a clear winner.
MAR 2021: MDB $250 – $260 Bull Call Spread
MAR 2021: MDB $250 – $260 Bull Call Spread – Every now and then I get to document picture perfect trades life these. MDB sold off after earnings and I was waiting for the downward momentum to come to an end before putting on this trade. A green candle combined with RSI popping its head above oversold territory caused me to take this trade. MDB is already trading at $290 and this trade looks like a sure shot winner at this point.
|FEB 2021||Starting Value: $11,300||Ending Value: $12,800|
January was a great month for me. On Feb 1st I have achieved a milestone of 500% profits. Last year has been historically the most challenging year due to COVID crash in March, 14% correction in Nasdaq in September and an Election cycle which disrupted trading for us. From here, I just need to double my money and we will get to our target. The journey goes on...
FEB 2021: LOW $160- $165 Bull Call Spread
FEB 2021: LOW $160 – $165 Bull Call Spread – Despite beating earnings, LOW fell down from $170 all the way down to $160 which caught my attention. It did keep dropping after I put on my trade (again not trying to catch bottoms here) and many of our traders got in at 155-160 strikes too. This drop even after an earnings beat is clearly unwarranted. It should snap back very fast if we get just a couple of green days next week.
FEB 2021: TTD $765- $775 Bull Call Spread
FEB 2021: TTD $765 – $775 Bull Call Spread – After posting positive earnings, TTD initially shot up from $835 to $921. But like many other got stocks got dragged down by the market all the way down to $760ish. I took this trade based on the support which exists at $760. With these kind of down days in the market, there are so many buying opportunities, some of them are literally a no brainer. TTD has made a decent recovery already after we put on this trade and is looking good going forward.
FEB 2021: HD $255 – $260 Bull Call Spread
FEB 2021: HD $255 – $260 Bull Call Spread – HD slightly beat earnings. Nothing special to write home about. But got punished anyway. The stock fell from $283 to $250 for no real reason. We are already seeing a green candle and just like with many other trades, things should snap back. All we are asking for is a slight recovery in the market next week.
FEB 2021: REGN $450- $455 Bull Call Spread
FEB 2021: REGN $450 – $455 Bull Call Spread – REGN has been stuck in a downward channel for some time and I have been waiting for while to put on a trade on this. The problem is when do you know the downward momentum has lost steam. In this case, I had to rely on RSI dropping below 30 indicating REGN was in oversold territory. And then RSI popping out of it which usually indicates a trend reversal. In addition DI- is now flattening out, providing more support to my directional bias.
FEB 2021: SPOT $310 – $320 Bull Call Spread
FEB 2021: SPOT $310 – $320 Bull Call Spread – SPOT gapped down all the way from $350 to $310 on a slight earnings miss. I took this trade based on the support which is approximately between $305 or $310 levels. The stock is still under some pressure and may stay like that for a few days before recovering from this downward movement. We have until 3/19 for this to play out, so no hurry here.
|JAN 2021||Starting Value: $9,300||Ending Value: $11,300|
Since I don't trade 1/31 and 1/8 expiration cycles to avoid volatility around end of the year, we had a ton of trades expiring on 1/15. I only document trades that I take on my 25K challenge account here. But we take a lot of trades in our private trading group. With earnings season on us, things will get pretty busy in the next week.
JAN 2021: NFLX $545 – $555 Bull Call Spread
JAN 2021: NFLX $545 – $555 Bull Call Spread – I have been waiting for this one after NFLX hit $593 on great earnings and subscriber growth. I took the trade based on the previous support levels of NFLX before the earnings report came out. This is how I usually trade earnings. Little did I know that we have a pullback coming up. The pullback really dragged NFLX all the way down to the next support at $515 and many of our members got into this trade at really sweet lower strikes. But within 1 day we are hovering back where we were before the pullback.
JAN 2021: LRCX $500 – $505 Bull Call Spread
JAN 2021: LRCX $500 – $505 Bull Call Spread – LRCX has now become a regularly traded stock in our group. It did have a pre-earnings runup like many earnings trade setups but sold off immediately after earnings. When this post-earnings profit taking happens, we just need to enter a trade at some kind of support level. I saw the support at $500 and entered there. Of course, with the broader market sell-off happening, LRCX got pulled back all the way down to $475 and many of our traders got into really low spreads, eg. $475 – $480. If the sell-off had continued, this could have been dragged down to next support at $460 too. Irrespective of how low it went and what happend, if it stays above $505, all trades will make the same amount of money.
JAN 2021: FB $260 – $265 Bull Call Spread
JAN 2021: FB $260 – $265 Bull Call Spread – Another awesome post-earnings trade. FB beat earnings and fell sharply. It got dragged down further by the sell-off this week, giving us a great entry at $260. Frankly, support is at $265, so this will turn out very nicely. Again, watch this how it plays out along with AAPL trade we took on the same day.
JAN 2021: SQ $215 – $220 Bull Call Spread
JAN 2021: SQ 215-220 Bull Call Spread – I don’t always know in advance what entry points I might take for my trades, but whenever I do, I post them in the morning announcement. SQ has clear support at $200 so I was hoping to get a $200-$205 Call Spread since 12/29. SQ did drop down to $208 and kept teasing me. It never got down to the entry point I was looking for and reversed right from there. Once I saw clear signs of a reversal followed my multiple indicators on the chart confirming this, I took a higher spread instead.
JAN 2021: IBM $115 – $120 Bull Call Spread
JAN 2021: IBM 115-120 Bull Call Spread – Trades were hard to come by this week as markets have been raging and going up constantly. I thought we would get a nice pullback today, but it was hardly anything. Regardless, we were able to get in on at least our 2nd post-earnings trade. (BLK was the previous one)
IBM disappointed Wall Street with a revenue miss in its AI and Cloud division which their CEO has been touting as the next big thing. This is my personal opinion but this level of an extreme reaction is a little uncalled for. Leaving my opinion aside, let us look at the technicals. Look at that red candle today. If it was a massive red candle filled from top to bottom, I would have waited a couple more days to see how this shapes up, but the fact that seller’s lost some control during the day as seen by the shrinking candle is a positive clue. In addition to that there is support at 115 and around 110 levels. If Nasdaq pulls back next week for some reason, that could take IBM down to next support of 110 which will give more buying opportunities if you missed today’s trade. But if markets stay the way they are, it appears the stock is going to bounce from here.
I have mentioned Candlesticks in this video: https://tradingextremes.com/technical-analysis-3-support-resistance-post-earnings-trades/ But there are many videos on youtube which can explain you how to properly make sense of a Candle.
JAN 2021: BLK $730 – $740 Bull Call Spread
JAN 2021: BLK 730-740 Bull Call Spread – We are smack in the middle of Earnings Seasons, which means most of the trades for the next month will be post earnings trades. BLK kicks off our first post-earnings trade. Coming back to our trade, I have lost count of how many times this post-earnings trade setup shows up over and over again. This is the exact setup – The stock has a nice run-up before even earnings are announced. Don’t ask me why it happens. Leaked news, insider trading. Who knows why? What we do know is that when this setup happens, more often than not you will see profit taking immediately after earnings are announced even when the earnings were good. Our goal is to take a trade, when the stock falls to the levels that it was trading before the pre-earnings run up started. The stock doesn’t always fall down to that level and in those cases, we skip those trades. In this case, the stock did fall to pre-earnings levels. There is also clear support at $720, so the stock might fall to $720 before turning back up. If this happens, you will get more opportunities to enter this trade at lower strike prices. This is also a reminder that the trading style which I teach involves taking it slow and steady and fitting it in with your life in general. There is no panic, greed or sudden windfall profits in my trading style. It is a slow paced method with clear rules in place. Also, I encourage you to read my trade alerts, consult your own charts and develop a feel if the trade sounds right to you before jumping in. I post a lot of trades and I want you to develop your own judgement about when a trade feels right. More often than not, waiting for a trade will give you better entry points at lower strike prices.
JAN 2021: DOCU $215 – $220 Bull Call Spread
JAN 2021: DOCU 215-220 Bull Call Spread – Most of our watchlist stocks were under pressure last week, which gave us some good entry points. As I have pointed out earlier, with mean reversion trading, the stocks will usually keep going against me after I put on the trade before turning around and heading in my direction. A nice side-effect of this is that you don’t have to jump at a trade alert the moment you see it. If you are busy or see my alert hours later, that is perfectly fine. Most of the time, you will get opportunities to enter the trade at better strikes than what I post if you wait for it. All software stocks have been under pressure lately after the massive run up they have experienced this year. I would simply attribute this to profit taking which is expected after these runups. DOCU has fallen down to a well-established support level of $215 which prompted me to take this trade.
JAN 2021: CRWD $210 – $215 Bull Call Spread
JAN 2021: CRWD $210 – $215 Bull Call Spread – I entered this trade, based on the support level at $210. The 2 green candles that appeared after a brief sell-off caused me to take this trade. Other indicators like ADX/RSI etc weren’t lining up yet. CRWD, continued to sell off for the next few days, which gave many buying opportunities to our members to get in at lower strikes. As I have mentioned many times in the past, with mean reversion trading, you hardly ever have to get on a trade immediately after I post a trade alert. More often than not, you get many opportunities in the following days to get into a trade and at lower strikes than what I post. We have many traders in China, Australia, Singapore who are always sleeping during our trade hours and always get these trade alerts the next day, but are still able to benefit from my program.
JAN 2021: VMW $130- $135 Bull Call Spread
JAN 2020: VMW $130- $135 Bull Call Spread – VMW gapped down to $130 suddenly after the announcement that their CEO is joining Intel. This extreme drop is an exaggerated market reaction which gives us trading opportunities. Companies which work at the scale of VMW are not dependent on a single person running the show. Companies like VMW have achieved the massive scale by having 100s of very smart employees working together towards a common vision.
If you look at the technicals, the stock has solid support at $135, followed by support around $130 and $125. This trade was purely done based on support/resistance levels.
|DEC 2020||Starting Value: $8,512||Ending Value: $9,280|
As mentioned in our private group, as a personal preference I avoid 12/31 and 1/8 trade expirations. The reason for this is that end of the year some times generates unexpected volatility. There is no rule written in stone that this will happen, but I have seen it many times in the past decade. As a result, I am going out to 1/15 expiration for all December trades.
DEC 2020: REGN $495 – $505 Bull Call Spread
DEC 2020: REGN $495 – $505 Bull Call Spread – You may find this trade slightly unusual. And although I only look at 3M daily charts, I did consult a yearly chart to see if there are any signs of support showing up on a larger time frame. An apparent support is showing up at $490 based on this chart. You could argue with me that I may have jumped in too early as there are no clear signs of a recovery here and the stock could stay under pressure for some more time. This trade is based on support/resistance, giving it 1.5 months to recover (1/15 expiration) and the fact that REGN got an FDA approval of their COVID anti-body cocktail. There is no real reason for me to be bearish. And all I am asking for is a small move to $505 in 45 days.
DEC 2020: MRNA $125- $135 Bull Call Spread
DEC 2020: MRNA $125- $135 Bull Call Spread – MRNA came to my attention on 12/1 when the stock popped on news of their COVID vaccine being submitted to FDA for emergency authorization. It almost behaved like a binary/earnings event due to this. The stock immediately gave up its gains but started recovering in the days following the news. Since this is not a stock in my watchlist and I wasn’t familiar with it’s personality, I decided to wait and see how it trades and if I can get a second opportunity.
An analyst downgrade caused the stock to drop > 6% which gave me the right opportunity. The stock came back down to the level on 12/1. This followed by a clear DOJI candle, prompted me to take this trade. I know it confused a lot of people about how we were able to get into a $125-$135 call spread for $5 when the stock was trading at $139. I initially tried to put on a $135 – $145 trade here. But when I noticed the spread was costing only $1.80 cents, I went deeper in the money until I was able to pay $5 for it, which resulted in the strikes I posted in the trade alert.
DEC 2020: HD $260- $265 Bull Call Spread
DEC 2020: HD $260- $265 Call Spread – Home Depot beat earnings and initially rose to $278. But dropped significantly on no real news. In fact the only real news that happened around the time of the drop was an analyst upgrade with a revised target of $320. I can only attribute this exaggerated downwards move to profit-taking. But my job is not to discuss why this happened. My job is to find trades when the correct setup shows up. In this case the exaggerated downward move is unwarranted and unsustainable. And we got a very nice opportunity to enter a trade at a well-established support level.
DEC 2020: TREE $230- $240 Bull Call Spread
DEC 2020: TREE $230- $240 Call Spread – Although, this trade was taken post earnings, but it is actually my typical mean-reversion trade. Lending tree beat earnings estimates and initially shot up. However, after announcing a secondary offering of 2.9 million shares, it got punished brutally. Diluting the value of a stock will usually bring the stock down slightly, but this exaggerated move is a little overdone.
I have been looking for any sign of a recovery and decided to take this trade after some of my indicators as shown below start showing some promise. You will see that although, ADX is still strong, the DI- has started pointing down. RSI is popping its head up after being in over-sold territory since 11/23. In addition to this a DOJI followed by a green day also boosts my confidence about this trade.
Of course, there are never any guarantees in the stock market, but my job is to follow the rules that have worked consistently for the past decade and put on trades when things line up. If you follow your rules consistently, you will end up having more winners and losers and that is all it takes to keep growing your account.
|NOV 2020||Starting Value: $7,585||Ending Value: $8,606|
We were trading very thin in October due to approaching elections. Elections are now over and normal trading has begun.
NOV 2020: SAM $880 – $890 Bull Call Spread
NOV 2020: SAM $880 – $890 Call Spread – We already have a trade on SAM expiring 12/18. Today we got a second opportunity to enter another SAM trade for 1/15 expiration. If you have read the second edition of my book, I have described these post-earnings trades there and have mentioned how sometimes you get 2 opportunities to enter these trades.
In this particular trade, SAM shot up after announcing great earnings. However, due to a 2nd lockdown news because to increasing COVID numbers, there was an extreme knee-jerk reaction and SAM dropped all the way down to $880ish which is a really great support level. These amazing trades don’t come by often, but you do get these golden opportunities every now and then.
NOV 2020: BBY $110 – $115 Bull Call Spread
NOV 2020: BBY $110 – $115 Call Spread – BBY gapped down even after beating earnings on 11/24. I had my eyes on a $110 – $115 post-earnings spread ever since and I got the opportunity today. If markets pullback next week, it might drop down to $105, but $110 seems to be the line in the sand for now.
Given that BBY was trading at $124 before earnings, this seems like an easily achievable target!
NOTE: If you have been trading with me for some time, you will instantly spot this as my typical post-earnings trade. I have also described these trades in the second edition of my book. These trades are based on Support/Resistance only as my other indicators don’t apply here.
NOV 2020: LRCX $430 – $425 Bear Put Spread
NOV 2020: LRCX $430 – $425 Bear Put Spread – Since we are in a bullish market, I am not doing any Bear Put spreads this year as the bearish moves don’t last long and quickly reverse towards the Bullish side. LRCX has shot up dramatically in the past few days and it is not an earnings event which caused this movement. It is just a share buyback program. Of course, there are no guarantees in the stock market on any trade being successful, but this movement really seems overdone to me.
NOV 2020: STMP $185- $190 Bull Call Spread
NOV 2020: STMP $185- $190 Bull Call Spread – STMP announced great earnings but the stock got punished brutally for that. Another reason why I don’t trade earnings as the market’s reaction is totally unpredictable. The exaggerated move to the downside was overdone and it caught my attention. I got into a $185-$190 Call Spread, after seeing the first signs of reversal.
NOV 2020: W $240- $250 Bull Call Spread
NOV 2020: W $240- $250 Bull Call Spread – W shot up to $304 after announcing great earnings. However, due to the sector rotation currently affecting Nasdaq, it dropped all the way down to $240 which is a well established support level. Which is what prompted me to take this trade. Sometimes, during steep sell-offs technical indicators don’t have time to catch up, so you have to use the simple concepts of Support & Resistance to pick out these trades.
NOV 2020: SHOP $900 – $910 Bull Call Spread
NOV 2020: SHOP $900 – $910 Bull Call Spread – SHOP is a huge mover. Price changes of $100 – $150 in a day are normal. Even after good earnings, it dropped all the way down to $900 levels, before reversing back up to $1050. Since, Nasdaq has been under pressure due to an apparent sector rotation, SHOP gave us another opportunity today at the $900 support level. As you can clearly see, the $900 level is very well established support for SHOP which prompted me to take this trade.
NOV 2020: ETSY $120 – $125 Bull Call Spread
NOV 2020: ETSY $120- $125 Bull Call Spread – ETSY initially shot up to $145 after an earnings beat. However, due to the rotation out of the tech sector every single tech stock in Nasdaq is currently under pressure. Etsy dropped down to $120 which is a well established support level, causing me to take this trade.
|OCT 2020||Starting Value: $5,400||Ending Value: $7,585|
Following strict money management rules and bail out trades, we not only recovered all the losses from September, but I reached the 2nd milestone of this challenge, which is tripling my account value. This year is not a hum drum year, with COVID pullback, September Correction and November elections hovering on our heads, so the last few months have been tricky to say the least.
OCT 2020: BIIB $260 – $265 Bull Call Spread
OCT 2020: BIIB $260 – $265 Bull Call Spread – With BIIB, the stock tanked before earnings. The earnings were actually good. Even if there was no earnings event, this kind of dramatic move would have caught my mean reversion mentality and I would be looking for an opposite trade anyways. To add to that, the stock is actually trading at a well established support of $260, which caused me to jump at this trade. All we need is for it to stay at $265 or above, and we will make our 94% ROI on this trade.
OCT 2020: OKTA $215- $220 Bull Call Spread
OCT 2020: OKTA $215- $220 Bull Call Spread – This one is a plain-vanilla mean reversion trade. The ones you must have read in the first edition of my book. The rationale is simple, OKTA gave up its earlier gains from this month and dropped all the way to $216. Given that the next support is at $210 level, I put on this trade after noticing that the DI- has flattened out indicating that the downward momentum has lost steam. RSI, although not conclusive is beginning to turn back up and the nasty long red candles have shrunk down in size, giving way to our first green DOJIsh candle.
OCT 2020: NFLX $480 – $485 Bull Call Spread
OCT 2020: NFLX $480 – $485 Bull Call Spread – NFLX is a solid company. But earnings disappointment dropped the stock like a rock from $572 all the way to $480. At this point my mean reversion mentality kicks in. If you look at the 2 support lines I have drawn, we have support at $483 and another one at $466. By the time NFLX dropped to $484, the nasty red candles had transitioned into a DOJI indicating that the downward momentum is losing steam. I had to make a decision based on my familiarity with NFLX and the fact that the downward momentum was dying down to put on this trade. Of course, with the stock market, there are no guarantees, so you have to use your best judgement based on the data currently available to you.
|SEPT 2020||Starting Value: $6,800||Ending Value: $5,400|
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 ->$4,700 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 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.
SEP 2020: DOCU $210 – $220 Bull Call Spread
SEP 2020: DOCU $110 – $120 Bull Call Spread – We have seen this setup before in ANET. I can’t explain all my setups in advance as the stock market is an ever-changing environment, but I do get into details when those setups show up. The way this setup works is – you will see a run up before earnings. Don’t ask me why it happens (insider trading? news leaks?). I don’t know and I don’t care. The bottom-line is that it does happen a lot. When you see a nice pre-earnings run up and you are scratching your head, you can almost rest assured that it will be followed by post-earnings profit taking even if the earnings report were great (Unless it is TSLA which defies all logic and rational thinking). We saw a similar pattern on DOCU. Instead of figuring out why it is happening, our job is to find out when to get in to a trade in these situations. You will see that I got into a trade based on simple support/resistance.
SEP 2020: AAPL $113.5- $118.5 Bull Call Spread
SEP 2020: AAPL $113.5- $118.5 Bull Call Spread – With AAPL, they had a 4:1 split which was coming up so I didn’t put on my regular post-earnings trade on it. When a split happens, it changes the personality and trading behavior of a stock, so I had to wait a little to get into AAPL. To add to this AAPL and TSLA both shot up to the moon so much pre-split, that a pullback was almost guaranteed in these cases.
SEP 2020: WDAY $220- $225 Bull Call Spread
SEP 2020: WDAY $220- $225 Bull Call Spread – WDAY was my typical post-earnings trade setup. It spiked at earnings, followed by a pullback to pre-earnings level, causing me to jump on this trade with a $220-$225 call spread. Read on to find out what happened next.
SEP 2020: ZM $365- $370 Bull Call Spread
SEP 2020: ZM $365- $370 Bull Call Spread – ZM was trading at $325 pre-earnings. Earnings caused a massive spike all the way up to $475! When such huge gap ups happen, it is not practical to expect the stock to pullback to pre-earnings trading levels. I had to use some level of judgement to get into this trade.
SEP 2020: W $280 – $285 Bull Call Spread
SEP 2020: W $280 – $285 Bull Call Spread – W was trading at $280 before earnings. After great earnings, the shot spiked up to new highs and never really gave us a chance to get into a trade on a pullback. Finally on 9/3, we got a nice pullback to pre-earnings level which allowed me to get into this trade. I am risking $250 in this trade to make a potential $250 if W stays above $285 by expiration.
|AUG 2020||Starting Value: $5,187||Ending Value: $6,800|
Aug 2020: HD $280 – $285 Bull Call Spread
Aug 2020: HD $280 – $285 Bull Call Spread – We have seen this setup before in ANET. I can’t explain all my setups in advance as the stock market is an ever-changing environment, but I do get into details when those setups show up. The way this setup works is – you will see a run up before earnings. Don’t ask me why it happens (insider trading? news leaks?). I don’t know and I don’t care. The bottom-line is that it does happen a lot. When you see a nice pre-earnings run up and you are scratching your head, you can almost rest assured that it will be followed by post-earnings profit taking even if the earnings report were great (Unless it is TSLA which defies all logic and rational thinking). We saw a similar pattern on HD. Instead of figuring out why it is happening, our job is to find out when to get in to a trade in these situations. You will see that I got into a trade based on simple support/resistance.
Aug 2020: ANET $210 – $220 Bull Call Spread
Aug 2020: ANET $210 – $220 Bull Call Spread – This is an interesting one. And experience helps with these kind of trades too. One of our members pinged me about a potential trade on ANET on 8/10. On that date, it had this huge first red candle and it appeared that the stock could be ready for a mean reversion trade. ANET is not a stock that I trade, so this was a tricky one. Practice does make perfect and I am sorry to throw the “I didn’t feel the trade” bomb at you. I told our member that the red candle seemed so strong that we should wait until we see at least some signs of the downward movement slowing down. I had not expected that it would go down all the way to do $210 frankly. But $210ish is when I saw the first signs of the downward momentum losing steam. And that is when I posted the trade alert.
Aug 2020: PYPL $190 – $195 Bull Call Spread
Aug 2020: PYPL $190 – $195 Bull Call Spread – This is a post earnings play. This is my usual post-earnings setup that you will find me trading all the time.
Aug 2020: ROKU $150 – $155 Bull Call Spread
Aug 2020: ROKU $150 – $155 Bull Call Spread – This is a post earnings play. ROKU had a pre-earnings run up followed by a post-earnings pull back which gave us an opportunity to get in.
|JUL 2020||Starting Value: $4,900||Ending Value: $5,187|
July 2020: TSLA $1400 – $1405 Bull Call Spread
July 2020: TSLA $1400 – $1405 -Bull Call Spread – As you know I don’t trade earnings at all. But post earnings generates some really good opportunities. This post-earnings trade on TSLA may look slightly peculiar to you. This trade was taken right after earnings so it may appear to be a post earnings trade. However, if you look at the charts, it doesn’t match up with my typical post earnings trades at all. If you have tried to trade TSLA, you must know this is not an easy stock to trade. Although, I watch it all the time like a hawk, I am very conservative about getting into a trade with TSLA and unless it doesn’t drop down to the levels which I am comfortable with, I just don’t take any trades on it. In fact, the last trade on TSLA that we did in this group was back in May 2020
I have been watching TSLA ever since for another opportunity but it always seemed too rich for me to get in. After the recent earnings, TSLA shot up to $1689, and based on support/resistance I had already set my mind on a very aggresive target of $1430. Many members have asked me in the forum about potential trades in TSLA, and I kept telling them I woundn’t touch it unless it hits $1430. In my opinion, Friday was a golden opportunity. The extreme and exaggerated downward push on TSLA was beautiful! Not only did it get down to $1430, but then it hit $1400 and went all the way to $1375. I got in at 1400-1405 call spread, but many of your got in even lower. Overall, I have a great feeling about this trade. So, congrats to all who got into this trade!
July 2020: HELE $195 – $200 Bull Call Spread
July 2020: HELE $195 – $200 Bull Call Spread – As you know I don’t trade earnings at all. But post earnings generates some really good opportunities. You will see a chart like this repeating on every post-earnings trade.
Post earnings trades are very different than our regular mean reversion trades. These are actually continuation trades. Since, earnings causes a reset in the stocks price movement and its personality, you have to respect the direction in which earnings sends the stock price and have to find trades in the same direction. We will be seeing many of these trades in the coming weeks.
With HELE, look at the yellow line I have drawn. Great Earnings + Analyst upgrades gapped up the stock to $209.99 Now, in these situations you will notice there is almost always a pullback after the initial earnings spike. The key to take a trade is to wait for that pullback to happen. You usually get 2 opportunities. We got in today on the first opportunity.
July 2020: BIDU $120 – $125 Bull Call Spread
July 2020: BIDU $120 – $125 Bull Call Spread – This is not our first stint with BIDU. We had some profitable trade on it in the past. The rationale is the same as with other trades in this round like CRM, A above, so I will not repeat myself.
July 2020: CRM $185 – $190 Bull Call Spread
July 2020: CRM $185 – $190 Bull Call Spread – CRM trade is also similar to OKTA and ADBE. I did get in at a slightly higher price point $185 -$190, but I know many of you were able to get in at $180-$185 spread. The $180 support line seems very strong and $180-$185 is a nice entry point for this trade.
Also, if you have been trading with me for some time, you will notice that since I do mean reversion trades, after I post the trade alert, you get many opportunities to get into the trade for a better price than me. This is because nobody can catch bottoms or tops, so after I post my trade, the stock can continue going against me for a couple of days. This also brings out a nice point – there is no need for you to drop everything you are doing and pull the trigger when you see a trade alert. I encourage the mentality of looking at the trade, understanding the structure and see if you can get filled. If you don’t get filled, simply let the trade go and wait for the next one. There is always another trade around the corner.
July 2020: ADBE $420 – $425 Bull Call Spread
ADBE $420 – $425 Bull Call Spread – ADBE’s trade is almost a clone of OKTA trade. On days when the markets pull back, you will find most charts looking similar to each other, which gives you multiple trading opportunities. It also gives you a chance of adding some diversification on your portfolio. In my 25k challenge portfolio, I hardly ever do 2 trades on the same stock in the same expiration cycle. This is a great example of where instead of putting on 2 contracts of OKTA, you add an ADBE instead.
July 2020: OKTA $195 – $200 Bull Call Spread
OKTA $195 – $200 Bull Call Spread – This is not the first time we are trading OKTA. We just closed a trade on OKTA on 7/6 with 94% profit. After peaking to $224, OKTA has been under some downwards pressure and I had been eyeing it for another trading opportunity. With this pullback, OKTA came down to $195 (I would have preferred $190), but I got into a $195-$200 bull call spread. In addition to the strong support line at $190, you will notice that the ADX is below 25, indicating that this downward pressure is not sustainable. i.e a perfect time for a mean reversion trade!
July 2020: ULTA $190 – $195 Bull Call Spread
ULTA $190 – $195 Bull Call Spread – This is a very simple trade based on a well established Support level of $190ish (you can always argue that support is at $188 or $193 but it is an imaginary line so it is always approximate).
|JUN 2020||Starting Value: $4,000||EndingValue: $4,900|
June 2020: SPOT $180 – $185 Bull Call Spread
SPOT $180 – $185 Bull Call Spread – With SPOT, we had done a really nice post-earnings $145-$150 Bull Call Spread which we closed on 5/20 for an 83% ROI in 20 days. After that, SPOT shot up to almost $200 very quickly. And I was monitoring it for a second opportunity. I missed the first pull back on 5/28, then another on 6/5 and finally got another shot at it yesterday. Notice, every time it bounces from that invisible support line, the stronger that support becomes.
June 2020: ROKU $100 – $105 Bull Call Spread
ROKU $100 – $105 Bull Call Spread – With ROKU, If you look at the chart below, $100 is a solid support level for ROKU. Because of this I am trying out a small Bull Call spread.
June 2020: NFLX $410 – $415 Bull Call Spread
June 2020: NFLX $410 – $415 Bull Call Spread – With NFLX, I had originally posted a post-earnings $395 – $400 Bull Call Spread as a “continuation trade”, but NFLX went up so fast that only few members were able to get in on this trade. After that, I have been waiting to see if I get another opportunity to get into a similar trade and we got that opportunity today.
|MAY 2020||Starting Value: $3,288||Ending Value: $4,000|
May 2020: BKNG $1620-$1630 Bull Call Spread
May 2020: BKNG $1620-$1630 Bull Call Spread. This is a post earnings trade. As you may have noticed on my earnings trades, they are not my usual mean reversion trades. Instead they are always continuation trades. i.e I trade in the direction of the earnings spike (whether it is up or down). There are always exceptions to this, which you may see me doing in the future, but 90% of the time this general rule applies.
May 2020: WMT $124-$129 Bull Call Spread
May 2020: WMT $124-$129 Bull Call Spread. This is a post earnings trade. As you may have noticed on my earnings trades, they are not my usual mean reversion trades. Instead they are always continuation trades. i.e I trade in the direction of the earnings spike (whether it is up or down). There are always exceptions to this, which you may see me doing in the future, but 90% of the time this general rule applies.
May 2020: SPOT $145 – $150 Bull Call Spread
May 2020: SPOT $145 – $150 Bull Call Spread. This is a post earnings trade. Spotify announced stellar earnings. Their 1st quarter reveneue surged 22%, they are the one of the few companies which is actually enjoying a virus surge right now.
May 2020: TSLA $770 – $775 Bull Call Spread
May 2020: TSLA $770 – $775 Bull Call Spread. TSLA ‘pulled a rabbit out of their hat’ with their earnings and gave Wall Street a positive surprise. When I saw a pullback in TSLA, I put on this trade. But something interesting happened the very next day…
May 2020: AMZN $2315 – $2320 Bull Call Spread
May 2020: AMZN $2315 – $2320 Bull Call Spread. This is a post earnings trade. Earnings causes a reset in the stocks momentum and direction. So, these trades are continuation trades not the usual mean reversion trades that I usually do.
May 2020: AAPL $290 – $295 Bull Call Spread
May 2020: AAPL $290 – $295 Bull Call Spread. This is a post earnings trade. Earnings causes a reset in the stocks momentum and direction. One has to respect the market’s post earnings reaction as these reactions are there for a reason. It accommodates the unknown news before the earnings and reflects that into the stocks new price. These trades are always continuation trades (i.e you have to trade in the direction of the market’s reaction). They are not the usual mean reversion trades I usually do. Because of this you will notice that none of my usual indicators apply here.
|APR 2020||Starting Value: $2,509||Ending Value: $3,288|
Due to unprecedented volatility in the market, this is a "challenging" challenge. Usually I do a round of trades each month and document their outcome on my website. However, with 1000 points up or down moves in the DOW becoming the norm, I was forced to give our March trades 55 days to work out in our favor. As you may or may not know, with each round of trades I risk a max of 30% of my portfolio. Once 30% is used up, I do not put on any more trades, until I close the previous round of trades. So, April was a silent month for me because the first round of trades blocked me for next 2 months.
|MAR 2020||Starting Value: $2,500||Ending Value: $2,509|
Mar 2020: AAPL $250 – $255 Bull Call Spread
Mar 2020: AAPL $250 – $255 Bull Call Spread. With the ongoing Coronavirus scare, and the deep sell-off we have experienced, some of my stocks are showing some signs of a reversal. AAPL being one of the rock-solid blue chip companies out there, I am always looking for trades in AAPL. In this trade, you will notice that all indicators haven’t lined up. However, notice my RUT and BKNG trades I executed on the same day. The signs were much clearer on those trades. Think of a bunch of boats riding on top of a huge wave in a storm. The wave takes all the boats down and up with it. So, the same rationale more or less applies to all the trades I have done on this day.
Mar 2020: RUT $1000 – $1005 Bull Call Spread
Mar 2020: RUT $1000- $1005 Bull Call Spread. With the ongoing Coronavirus scare, all stocks and indexes have been dropping like a rock. With some of our indicators indicating that this might be the end of this monstrous pullback, I am testing the waters with a $1000 – $1005 Bull Call Spread.
Mar 2020: BKNG $1200 – $1210 Bull Call Spread
Mar 2020: With the ongoing Coronavirus scare, every single stock including travel stocks like BKNG have been pulling back. With the unprecedented conditions and volatility in the market, we have to tread carefully. With signs popping up indicating that this sell-off may be nearing its end, I am trying out this trade to test the waters.