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Dec 2019: BKNG $2067- $2037 Bear Put Spread



Trade Structure

$2067-$2037 Bear Put Spread

Trade Date


Expiration Days


Trade Rationale

Dec 2019: BKNG $2067-$2037 Bear Put Spread. With the market on a tear, BKNG has been making new highs day after day. Finally on 12/30 we see a red candle showing signs of a possible exhaustion. ADX is still below 40 which means there is no clear signs of this trend continuing. On top of that RSI is giving us a very clear signal. It was in the overbought territory and finally dipped below 70 indicating a possible trend exhaustion.

Trade Selection Criteria

Overall market movement

Overall market has been on a tear for weeks. I mean look at BKNG, looks like it is invincible and will never stop. However, our first red candle after this extended trend combined with RSI is giving us a possible trading opportunity here.

No Earnings or Significant News

Earnings are behind us and the next earnings will be after our expiration cycle. Earnings scheduled for 02/26/2020

Bollinger Bands outside Keltner Channels

Bollinger Bands are clearly outside Keltner Channels. Perfect time for a mean reversion trade 

RSI Analysis

RSI finally dipped below 70 after being in over-bought territory for quite some time, indicating a possible trend reversal.

ADX Analysis

ADX is weak and does not give any clear signals about the current trend.

Trade Analysis

After I put on my position the stock went down for a day and then resumed its march to make new highs. However, I did not lose 50% of my investment at this time so I held on to the position. If you have read my book you will notice that this is inline with my loss management criteria. Fast forward to 1/24 expiration day, the stock crashed and burned allowing me to close the position for a 100% profit.

Trade Outcome




Beginning Account Balance


Ending Account Balance


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


  1. Fred Ferenczhalmy

    Looks like this ones a winner.

    • Nishant

      Yes Fred. An absolute winner. I will be updating the open positions this weekend to reflect the outcomes.

  2. Albert Johnson

    Really enjoyed your book and lessons – but was a little impatient to try out your methods and jumped into a bullish vertical trade on Google perhaps too soon – but have until Feb 21st – so we’ll see. Left a positive review on Amazon and telling friends about book.

    • Nishant

      Albert, thanks for the kind words and sharing my book. Just curious what does your spread look like?

  3. Albert Johnson

    Goog Feb 21 2020 vertical call spread 1480/1485; Though most indicators were heading up even after multiple green bar days, RSI strong and ADX over 50 – may have taken a long position too soon – but have some time and not down 50% yet. .

  4. Albert Johnson

    Looks like when you open several positions in one month – you still make sure to never have more than a 1/3 of your invested capital at risk or in play- correct? Any particular reason to limit a specific trade to $600-800 when you could go higher? Or just diversifying/spreading your risk even with that 1/3?

    • Nishant

      Albert, weird that I just saw your comment after so long. Yes, I am doing it for diversification and spreading risk. Not putting all my eggs in 1 basket basically.

  5. Maurice Matthews

    Quick question with a $30 spread shouldn’t the cost be closer to $2000 or am I thinking about the pricing incorrectly?

  6. Maurice Matthews

    I caught my mistake. It should be closer to $1500. ~$250 per 5 point spread.


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