fbpx
‪(720) 819-5927‬ support@25koptionschallenge.com

Aug 2020: ANET $210 – $220 Bull Call Spread

Stock

ANET

Trade Structure

$210- $220 Bull Call Spread

Trade Date

08/13/2020

Price Paid

$500

Expiration Days

9/18/2020

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

This is an interesting one. And experience helps with these kind of trades too. One of our members pinged me about a potential trade on ANET on 8/10. On that date, it had this huge first red candle and it appeared that the stock could be ready for a mean reversion trade. ANET is not a stock that I trade, so this was a tricky one. Practice does make perfect and I am sorry to throw the "I didn't feel the trade" bomb at you. I told our member that the red candle seemed so strong that we should wait until we see at least some signs of the downward movement slowing down. I had not expected that it would go down all the way to do $210 frankly. But $210ish is when I saw the first signs of the downward momentum losing steam. And that is when I posted the trade alert.

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

N/A

No Earnings or Significant News

Earnings are behind us and were announced on 08/04

Bollinger Bands outside Keltner Channels

This is a post earnings trade – our regular mean reversion indicators don’t apply here.

N/A

RSI Analysis

This is a post earnings trade – our regular mean reversion indicators don’t apply here.

N/A

ADX Analysis

This is a post earnings trade – our regular mean reversion indicators don’t apply here.

N/A

Trade Analysis

Due to a massive 14% correction in NASDAQ, most of the Sept trades went under-water. The account fluctuated all the way down from $6,800 ->$4,900 at one time. I recommended all my members to put on "Bail Out Trades" for Oct. Because of doing that, you can see that I am slowly approaching my $6,800 balance again. What are Bail Out trades? The second edition of the book is due out any time and I will be mentioning in the book how you can save your portfolio from Market corrections and Black Swan events. Stay tuned.

Trade Outcome

LOSER

Profit/Loss

$-500

Beginning Account Balance

$6,200

Ending Account Balance

$5,300

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

Submit a Comment

Your email address will not be published.

Free no-obligation 7-day trial The Bull Run is just getting started...

The massive 5 month long correction is behind us and the Bull run is just getting started. Are you ready to take advantage of it?