June 2020: SPOT $180 – $185 Bull Call Spread

Stock

SPOT

Trade Structure

$180 - $185 Bull Call Spread

Trade Date

06/11/2020

Price Paid

$233

Expiration Days

07/17/2020

THIS IS A DELAYED TRADE FOR EDUCATIONAL PURPOSES ONLY.

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Trade Rationale

If you have read my book, you will notice that I have gone into detail about how I do my mean reversion trades. But the stock market is a multi-dimensional being and if you don't take advantage of all opportunities it gives, you will miss out on a lot of profits. If you are a paying member, you already know how I trade post-earnings by using something called "continuation trades", "support/resistance" trades, and "squeeze trades". This trade is based on Support/Resistance. 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.

Trade Selection Criteria

Overall market movement

Today was a very interesting day. It felt like the bottom really fell out. We had a huge 1800 point drop in a single day. This definitely meets our parameters for overall market movement as detailed in my book.

No Earnings or Significant News

Earnings were just announced on 4/29 and are behind us

Bollinger Bands outside Keltner Channels

This trade is based on support/resistance. BB/KCs don’t apply here. Please see trade rationale above.

RSI Analysis

This trade is based on support/resistance. BB/KCs don’t apply here. Please see trade rationale above.

ADX Analysis

This trade is based on support/resistance. BB/KCs don’t apply here. Please see trade rationale above.

Trade Analysis

This was a picture perfect trade and gave us a 108% ROI in 2 short weeks.

Trade Outcome

WINNER

Profit/Loss

$252

Beginning Account Balance

$4,300

Ending Account Balance

$4600

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