Oct 2021: SI $135 – $140 Bull Call Spread | Mean Reversion Trading Using Options

Oct 2021: SI $135 – $140 Bull Call Spread

Stock

Trade Structure

$135-$140 Call Spread

Trade Date

10/19/2021

Price Paid

$250

Expiration Days

11/19/2021

We are on week 6 of 100% winning trades. A pullback is expected.

We are on week 6 of back to back winning trades and so far where we literally had 100% winners every week. But to expect this to continue in the future is unrealistic. Markets are finally slowing signs of exhaustion and I do expect a pullback which will be a buying opportunity.

Winners | Mean Reversion Trading Using Options

THIS IS A DELAYED TRADE FOR EDUCATIONAL PURPOSES ONLY.

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Trade Rationale

With most of the earnings trades, you will find some level of judgement and experience coming into play. On any trade that I take right on the day of earnings, it will always come down to watching the price action on that day. I watch the daily candle and see signs of stabilizing before taking these trades. A solid red candle is usually a sign of danger and it is best to wait for another day on those trades. A candle which starts looking like a DOJI with a small body and long wicks are the best indicators of downward pressure dying off. But there is a lot more art than any science to this. You just need to keep watching and learning to develop your own feel for these trades.