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JUN 2021: MDB $360 – $365 Bull Call Spread



Trade Structure

$360- $365 Call Spread

Trade Date


Price Paid


Expiration Days



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Trade Rationale

MDB has been very strong recently and suddenly gapped down on 6/20 after they announced a secondary stock offering. Although a stock offering does dilute shares, I took this trade based on an exaggerated market reaction (gap-down) on a strong stock. The stock did fall a little further before recovering and is now trading at $362.

Trade Selection Criteria

Overall market movement

May sell-off is behind us and markets are in decent shape. There is no exaggerated movement in the overall markets and this trade is based on purely this stocks own movement. 


No Earnings or Significant News

Earnings are behind us and were announced on 6/3

Bollinger Bands outside Keltner Channels

Bollinger bands are clearly outside Keltner Channels.

RSI Analysis

I took this trade based on an exaggerated market reaction, so RSI and ADX don’t apply to this trade.


ADX Analysis

I took this trade based on an exaggerated market reaction, so RSI and ADX don’t apply to this trade.


Trade Analysis

MDB just went against me after putting this spread on and never recovered. But this trade highlights an important rule that I follow in my trading. i.e cutting losers at 50% loss. This rule although not as important for accounts > $50K but is critical if you want to grow a small account like I do with my $25K challenge. If you follow the 50% loss rule, it creates a statistical advantage for you. By doing this 1 winner should ideally cancel out 2 losers. This is what creates "positive expectancy" and in trading your account will never grow if you don't have positive expectancy built into your trading method.

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

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