JAN 2021: DOCU $215 – $220 Bull Call Spread
Stock
DOCU
Trade Structure
$215 - $220 Call Spread
Trade Date
1/04/2020
Price Paid
$250
Expiration Days
02/05/2021
THIS IS A DELAYED TRADE FOR EDUCATIONAL PURPOSES ONLY.
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Trade Rationale
Most of our watchlist stocks were under pressure last week, which gave us some good entry points. As I have pointed out earlier, with mean reversion trading, the stocks will usually keep going against me after I put on the trade before turning around and heading in my direction. A nice side-effect of this is that you don’t have to jump at a trade alert the moment you see it. If you are busy or see my alert hours later, that is perfectly fine. Most of the time, you will get opportunities to enter the trade at better strikes than what I post if you wait for it. All software stocks have been under pressure lately after the massive run up they have experienced this year. I would simply attribute this to profit taking which is expected after these runups. DOCU has fallen down to a well-established support level of $215 which prompted me to take this trade.
Trade Selection Criteria
Overall market movement
Nasdaq and most of our watchlist stocks were under pressure last week, which gave us some good entry points.
No Earnings or Significant News
Earnings are behind us and were announced on 12/03
Bollinger Bands outside Keltner Channels
Bollinger bands are clearly outside the Keltner Channels.
RSI Analysis
N/A This trade was done based on Support/Resistance
ADX Analysis
N/A This trade was done based on Support/Resistance
Trade Analysis
DOCU took off almost immediately after putting on this trade, but reversed back after a few days. We had to wait until the last week to close this trade. But in the end we banked our 94% ROI as usual on all these trades.

Trade Outcome
WINNER
Profit/Loss
$235
Beginning Account Balance
$9,900
Ending Account Balance
$12,500
Are you really able to enter with price of 250$? Pre market for this price and didn’t initiate at all. I think you’re not playing real money.
Yes I did. I put on these trades live in front of 1000 traders. There is no hiding when you have such a large group of traders who are also putting on the same trades with you.
Wow great move! Looks like it has already resulted in profit.
This is funny because I read your book and put on a Bear put spread on DOCU at 1/13 based of your strategy and teachings.
So far it’s resulting in profit!
Thanks for all the value you’ve provided me!