FEB 2021: TTD $765- $775 Bull Call Spread

Stock

TTD

Trade Structure

$765- $775 Call Spread

Trade Date

2/23/2021

Price Paid

$500

Expiration Days

04/01/2021

THIS IS A DELAYED TRADE FOR EDUCATIONAL PURPOSES ONLY.

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Trade Rationale

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.

TTD_765_775_CallSpreadOpen | Mean Reversion Trading Using Options

Trade Selection Criteria

Overall market movement

N/A this is a post earnings trade. The individual stock’s price action is more important for these trades.

N/A

No Earnings or Significant News

This is a post earnings trade. Earnings were announced on 2/18 and are behind us

CHECK

Bollinger Bands outside Keltner Channels

Bollinger bands are clearly outside the Keltner Channels.

CHECK

RSI Analysis

This is a post earnings trade. Our regular indicators don’t apply here since all these trades are taken based on Support/Resistance levels. I have described these in the 2nd edition of my book as well.

N/A

ADX Analysis

N/A

Trade Analysis

TTD got brutally affected by the correction in Nasdaq and sold off all the way down to $563 before recovering. We did run out of time on this trade, so it was a full loser. Corrections like the one that we just experienced in Nasdaq are a reality of life. The strict money management and risk management rules I teach in our private group, allow us to make money when things are good and prevent portfolio blowouts when things are bad. My 25K challenge account is still down 15% from Feb Highs (but still positive for the year 350% gains since last April). My 250K challenge portfolio has fully recovered and is at a 444% gain since last April at this point.