JAN 2021: VMW $130- $135 Bull Call Spread
Stock
VMW
Trade Structure
$130 - $135 Call Spread
Trade Date
1/13/2020
Price Paid
$250
Expiration Days
02/19/2021
THIS IS A DELAYED TRADE FOR EDUCATIONAL PURPOSES ONLY.
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Trade Rationale
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.
Trade Selection Criteria
Overall market movement
There is no extreme movement in Nasdaq. This was a trade done on the extreme movement on this particular stock
No Earnings or Significant News
Earnings are behind us and were announced on 11/24
Bollinger Bands outside Keltner Channels
Bollinger bands are clearly outside the Keltner Channels.
RSI Analysis
N/A This trade was done based on Support/Resistance
ADX Analysis
N/A This trade was done based on Support/Resistance
Trade Analysis
The trade worked out beautifully as expected. We took advantage of the knee jerk reaction from the market on irrelevant news. This trade was a no-brainer and closed with 11 days still remaining to expiration.
Trade Outcome
WINNER
Profit/Loss
$235
Beginning Account Balance
$10,200
Ending Account Balance
$13,084
VMW isn’t on either of the Watchlists. Is there a screener you sued to find it?
My watchlist changes every month. Not sure if you are a paid member, but I give the new watchlist to our paid members at the beginning of each month on our Discord group.
What is Discord? Not about to join since I have no clue what Discord Group is and how to find it. Sounds a bit hokey to me.
Discord is like Facebook. And a Discord group is like a private Facebook group.