SEP 2020: ZM $365- $370 Bull Call Spread
Stock
ZM
Trade Structure
$365- $370 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.
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Trade Rationale
ZM was trading at $325 pre-earnings. Earnings caused a massive spike all the way up to $475! When such huge gap ups happen, it is not practical to expect the stock to pullback to pre-earnings trading levels. I had to use some level of judgement to get into this trade.
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 08/31
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
Despite the fact, that we experienced a big correction in the markets during Sept, ZM stayed obstinate and after falling a little further, continued on its journey towards the upside. We were able to close this position in 20 short days for our full profit target of 94%
Trade Outcome
WINNER
Profit/Loss
$235
Beginning Account Balance
$6,700
Ending Account Balance
$5,100
You have two different symbols here…Under “trade rationale” you show ZM, and under “trade analysis”, you show W.
Thanks for pointing that out. Updated the post. The closing image was also wrong, which I have fixed now.