SEP 2020: WDAY $220- $225 Bull Call Spread
Stock
WDAY
Trade Structure
$220- $225 Bull Call Spread
Trade Date
09/03/2020
Price Paid
$250
Expiration Days
10/02/2020
THIS IS A DELAYED TRADE FOR EDUCATIONAL PURPOSES ONLY.
To participate in our live challenge and to access our online training, please click “Your Account” and upgrade to the “Live Trader” plan.
Trade Rationale
WDAY was my typical post-earnings trade setup. It spiked at earnings, followed by a pullback to pre-earnings level, causing me to jump on this trade with a $220-$225 call spread. Read on to find out what happened next.
Trade Selection Criteria
Overall market movement
This is a post-earnings trade. My usual mean reversion parameters don’t apply here. These trades are based on Support/Resistance only
No Earnings or Significant News
Earnings are behind us and were announced on 08/27
Bollinger Bands outside Keltner Channels
This is a post earnings trade – our regular mean reversion indicators don’t apply here.
RSI Analysis
This is a post earnings trade – our regular mean reversion indicators don’t apply here.
ADX Analysis
This is a post earnings trade – our regular mean reversion indicators don’t apply here.
Trade Analysis
Although, this was typical earnings trade setup and I was expecting it to be fully profitable, it coincided with a massive 14% pullback in NASDAQ in Septmeber. Due to this WDAY kept dropping like a rock all the way down to $195! At this point, I had no hope for any recovery and I added a "bail out" trade for it. Bail out trades are covered in my book's second edition which is due to come out soon.
Although, the stock sold off most of the month, but I was able to get out for a scratch (no profit or loss at the end of the month).
Trade Outcome
SCRATCH
Profit/Loss
$0
Beginning Account Balance
$6,725
Ending Account Balance
$5,400