NOV 2020: SAM $880 – $890 Bull Call Spread
Stock
SAM
Trade Structure
$880- $890 Call Spread
Trade Date
11/30/2020
Price Paid
$500
Expiration Days
01/15/2020
THIS IS A DELAYED TRADE FOR EDUCATIONAL PURPOSES ONLY.
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Trade Rationale
NOV 2020: SAM $880 - $890 Call Spread - We already have a trade on SAM expiring 12/18. Today we got a second opportunity to enter another SAM trade for 1/15 expiration. If you have read the second edition of my book, I have described these post-earnings trades there and have mentioned how sometimes you get 2 opportunities to enter these trades.
In this particular trade, SAM shot up after announcing great earnings. However, due to a 2nd lockdown news because to increasing COVID numbers, there was an extreme knee-jerk reaction and SAM dropped all the way down to $880ish which is a really great support level. These amazing trades don't come by often, but you do get these golden opportunities every now and then.
Trade Selection Criteria
Overall market movement
There is no extreme movement in Nasdaq. This was a post-earnings trade, so the regular market indicators are not as relevant. I have talked about these trades in the second edition of my book.
No Earnings or Significant News
Earnings are behind us and were announced on 10/22
Bollinger Bands outside Keltner Channels
Bollinger bands are clearly outside the Keltner Channels.
RSI Analysis
Our regular indicators don’t apply to post-earnings trades
ADX Analysis
Our regular indicators don’t apply to post-earnings trades
Trade Analysis
Analysis will be updated when we close this trade.
Trade Outcome
N/A
Profit/Loss
$0
Beginning Account Balance
$8,600
Ending Account Balance
$N/A
