July 2020: OKTA $195 – $200 Bull Call Spread
Stock
Trade Structure
Trade Date
Price Paid
Expiration Days
THIS IS A DELAYED TRADE FOR EDUCATIONAL PURPOSES ONLY.
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Trade Rationale
Trade Selection Criteria
Overall market movement
The market has been going up non-stop for 10 days, and we got a quick pullback today, when DOW dropped more than 300 points today.
No Earnings or Significant News
Next earnings are on 10/26
Bollinger Bands outside Keltner Channels
Bollinger Bands are outside Keltner Chanels.
RSI Analysis
RSI is smack in the middle (i.e not oversold or overbought)
ADX Analysis
ADX is pointing down and below 25, indicating that the downward pressure is not sustainable.
Trade Analysis
Trade Outcome
Profit/Loss
Beginning Account Balance
Ending Account Balance
Hi Nishant,
Love your book and the simplicity with which you trade options.
on 7/14 Okta’s low was 193 and not 190 and closed at 206, correct? So based on your position you actually went ITM the same day?
Would you close your position if you are already ITM?
The problem with debit spreads is they don’t become profitable as soon as they go ITM. You have to wait until expiration is at least 10-12 days away. The reason for this is that unless the extrinsic value drains out of both the options, they kinda cancel each other’s profits (and losses)