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Aug 2020: PYPL $190 – $195 Bull Call Spread

Stock

PYPL

Trade Structure

$190- $195 Bull Call Spread

Trade Date

08/13/2020

Price Paid

$250

Expiration Days

9/18/2020

THIS IS A DELAYED TRADE FOR EDUCATIONAL PURPOSES ONLY.

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Trade Rationale

This is a post earnings play. This is my typical post-earnings setup that you will find me trading all the time. It is characterized by a post-earnings spike, followed by a pullback. PYPL spiked up and kept going higher after earnings. Sometimes, this does happen and you don't get any opportunity to get in on a trade. However, PYPL did pullback to pre-earnings trading range/support level which gave us a great opportunity to get into a 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

N/A

No Earnings or Significant News

Earnings are behind us and were announced on 7/29

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

$-250

Beginning Account Balance

$6,200

Ending Account Balance

$5,100

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

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