Sep 2021: V $220 – $225 Bull Call Spread

Stock

V

Trade Structure

$220-$225 Call Spread

Trade Date

9/22/2021

Price Paid

$250

Expiration Days

10/22/2021

COMING OUT OF A CORRECTION

During a correction, 2-4 weeks of trades will get absolutely wiped out, but we save so much cash with this trading method that using it strategically will save you from these events which come unannounced and without warnings. All the trades taken during the correction are looking like winners. Here is how the next few weeks look like for our trading group consisting of 1000+ traders. Read the analysis in the end for tips on how to survive corrections.

THIS IS A DELAYED TRADE FOR EDUCATIONAL PURPOSES ONLY.

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Trade Rationale

Mean reversion trade galore. Only if trading was this easy. The number of near perfect mean reversion trade setups is simply mind blowing and here is another one which is already playing out in my favor. This is me taking advantage of the correction by deploying the 70%-80% saved cash in my portfolio.

Trade Selection Criteria

Overall market movement

No prizes for guessing. This was the big SeptemBEAR and markets have been getting annihilated. I prefer taking trades on pullbacks so this is a great setup.

CHECK

No Earnings or Significant News

Earnings are on 10/26 and do not overlap with our trade.

CHECK

Bollinger Bands outside Keltner Channels

Bollinger bands are clearly outside Keltner Channels

CHECK

RSI Analysis

RSI is turning up after the recent sell off

CHECK

ADX Analysis

DI- is turning down and DI+ turning up. These are rare, but amazing setups to trade. 

CHECK

Trade Analysis

SEP 2021: V $220-$225 Bull Call Spread - Corrections come without warnings and can happen all of a sudden. By the time you realize what happened, you are already in the middle of it and it is usually too late to start taking Bearish postions at this time. A critical piece of the $25K Trading method is that we save 70% cash in our portfolio at all times. When markets are peaking, we further reduce our allocations and sometimes even go to 80% - 90% cash at times. September correction is a perfect example of how this works out. I always tell our members to do whatever it takes to keep that winners > losers equation in play for all expirations. But when corrections happen, you will see 2-4 weeks of trades going underwater. This is the time when you need to deploy your saved cash and take advantage of the correction. Our group put on several trades during the deepest part of the correction and as of today both my accounts have recovered any losses that I had during September.

Trade Outcome

WINNER

Profit/Loss

$235

Beginning Account Balance

$16,300

Ending Account Balance

$21,100

To follow along the strategies we use in the $25K challenge, we recommend that you get the strategy book which explains the whys and wherefores of our method. Get it here=> https://amzn.to/2MUOCE5

2 Comments

  1. Arthur Giannini
    Arthur Giannini on October 20, 2021 at 10:37 am

    This was very informative. Tx.

    I have read your book and had question on length of typical option strategies

    I believe in you book you mentioned 35-40 days.

    Are all your trades set-up like this or does it depend on the type of trade and situation. Do you use strangles or straddles at all or mainly the vertical spreads

    Reply
    • Nishant
      Nishant on October 20, 2021 at 10:45 am

      All my trades last 30 days. The only exception is Corrections where I could take trades 45 days out. Although, I have experimented with every single option strategy out there like Iron Condors, Buterflys, Ratio Spreads, Straddles, Strangles and it was lot of fun doing it, but it didn’t make any extra money. All these fancy strategies are out there so authors can write books about them and just a way to keep your mind busy. The real test happens when you try to make money consistently using all these strategies. I now stick to debit spreads only (verticals). They are the easiest to understand, execute and track and I have used them to generate 1000% returns in my portfolio for a decade now.

      Reply

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