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AUG 2021: CI $200 – $205 Bull Call Spread

Stock

CI

Trade Structure

$200- $205 Call Spread

Trade Date

8/5/2021

Price Paid

$250

Expiration Days

9/10/2021

THIS IS A DELAYED TRADE FOR EDUCATIONAL PURPOSES ONLY.

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Trade Rationale

For post-earnings trades, I try to post the stock symbols and any entry levels that look appealing before the market opens in our private Discord group. I do this so that you know in advance what trades I am considering. However, it is impossible to gauge correct strikes until after the market opens. CI had already fallen down quite a bit before even the market opened and I had posted 215-220 as a potential entry level in my morning announcement. However, these post-earnings trades which I take on the next day after earnings do require some judgement. CI kept dropping after the market opened and I waited for that nasty red candle to stabilize a little before entering this trade. Also not that the nearest support is around $200. I usually just watch the daily candle on my 3M-daily chart for these kinds of trade setups, but you could switch to a 5-min daily chart if you want more granularity. I am used to spotting these trade setups, so I don’t feel the need to switch to smaller time frames.

Trade Selection Criteria

Overall market movement

This trade is a post earnings trade. With these kind of trades I pay attention to the individual stock movement more than anything else. The overall market movement does not factor much into it. 

N/A

No Earnings or Significant News

This is a post-earnings trade. The earnings were announced a few days ago.

Bollinger Bands outside Keltner Channels

Bollinger bands are clearly outside Keltner Channels.

RSI Analysis

This trade was taken based on Support/Resistance levels. RSI did not factor into the analysis.

N/A

ADX Analysis

This trade was taken based on Support/Resistance levels. RSI did not factor into the analysis.

N/A

Trade Analysis

CI mostly traded flat throughout the trading window. On 9/2 it spiked from an opening price of 211 to 219 in a single day and I was able to close this trade for 94% ROI. With debit spreads, you really need a $5 move in your favor to double your money!

Trade Outcome

WINNER

Profit/Loss

$235

Beginning Account Balance

$16,100

Ending Account Balance

$16,400

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