May 2020: SPOT $145 – $150 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
We are experiencing unprecedented volatility in the markets due to the ongoing Coronavirus scare. We put on this trade, when we saw a pullback in the market and SPOT.
No Earnings or Significant News
Earnings were just announced on 4/29 and are behind us
Bollinger Bands outside Keltner Channels
N/A – For post earnings trade my regular indicators don’t apply.
RSI Analysis
N/A – For post earnings trade my regular indicators don’t apply.
ADX Analysis
N/A – For post earnings trade my regular indicators don’t apply.
Trade Analysis
Trade Outcome
Profit/Loss
Beginning Account Balance
Ending Account Balance
Very nice job. Nicely executed and it worked out well.
I read your book to know call/put spreads and your examples are crystal clear. Coming back to this SPOTIFY trade, which you closed in 20 days and the original expiry was 06/05/2020, so do you wait till 06/05/2020 to open another trade using that profit.
Glad you found the book helpful. The goal is to use up 30% of my capital at all times. When the money is freed up, I start looking for other trades. We just put a trade on WMT which I will be documenting in a few days.
I made this same trade and have been unable to close for days…. How to you decide how far below the current mark to close your options in these very low volume options contracts?
I always place a GTC closing order at $4.85 after I open a $5 wide debit spread like this one. That way, it will automatically get filled when the time is right. All the members in our group were able to close this trade without any issues.