MAY 2021: MRNA $140-$145 Bull Call Spread

Stock

MRNA

Trade Structure

$140- $145 Call Spread

Trade Date

5/6/2021

Price Paid

$250

Expiration Days

05/18/2021

THIS IS A DELAYED TRADE FOR EDUCATIONAL PURPOSES ONLY.

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Trade Rationale

This is one of those outliers where the stock instantaneously takes off in my direction after putting on my trade. Trust me, I don’t have any skills to catch bottoms. This is pure luck at play here. If you have been with me in our private group, you will notice that with mean reversion trading, most of my trades go against me for a few days before they start to recover and head in my direction. I got into this trade after using the same reasoning as I do with all my other trades, but MRNA just took off in my direction within seconds. I am not even sure if anybody else got into this trade with me.

MRNA_140_145_CallSpreadOpen | Mean Reversion Trading Using Options

Trade Selection Criteria

Overall market movement

Markets have been under pressure since 5/1. Is ‘Sell in May’ becoming a self-fulfilling prophecy?

CHECK

No Earnings or Significant News

This is a post earnings trade and earnings are behind us

CHECK

Bollinger Bands outside Keltner Channels

This is a post-earnings trade. We use support/resistance for these as other indicators are mostly irrelevant for these kind of trades

N/A

RSI Analysis

This is a post-earnings trade. We use support/resistance for these as other indicators are mostly irrelevant for these kind of trades

N/A

ADX Analysis

Although, I use support/resistance for 90% of my post-earnings trades, in this case DI- is flattening out indicating a loss of downward pressure.

N/A

Trade Analysis

As mentioned in the trade rationale, I literally picked the bottom on this one. MRNA took off right after taking this trade in my direction, allowing me to close this trade for 94% ROI in just 22 days.