Jan 2020: BKNG $1875- $1895 Bull Call Spread



Trade Structure

$1875-$1895 Bull Call Spread

Trade Date


Expiration Days


Trade Rationale

Jan 2020: BKNG $1875- $1895 Bull Call Spread. The market had its worst down day since October. Although, our technical signals haven't caught up yet, sometimes experience helps out here. BKNG has been pulled back way too much for no foundational reason. This is a great time for a mean reversion trade. We just closed a nice profitable Bear Put Spread a few days ago. But now it is time to change our outlook to Bullish and buy a Bull Call Spread instead.

Trade Selection Criteria

Overall market movement

After making new highs, week after week, Dow Jones dropped up to 500 points yesterday at one point in the day. The market had its worst day since Oct 2019.

No Earnings or Significant News

Earnings are behind us and the next earnings will be after our expiration cycle. Earnings scheduled for 02/26/2020

Bollinger Bands outside Keltner Channels

Bollinger Bands are way outside Keltner Channels. As you can see in the chart, BKNG dropped like a rock in the past few days with no real reason. Since, I am aware of the stocks “personality”, this is highly unusual. Perfect time for a mean reversion trade 

RSI Analysis

RSI is below 30 indicating oversold conditions. But not showing clear signs of a reversal.

ADX Analysis

ADX below 40. So not too strong and not weak. Again, we are not getting any clear signals here as well.

Trade Analysis

Analysis will be updated when we close the trade.

Trade Outcome




Beginning Account Balance


Ending Account Balance


To follow along the strategies we use in the $25K challenge, we recommend that you get the strategy book which explains the whys and wherefores of our method. Get it here=> https://amzn.to/2MUOCE5