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June 2020: NFLX $410 – $415 Bull Call Spread

Stock

NFLX

Trade Structure

$410 - $415 Bull Call Spread

Trade Date

06/04/2020

Price Paid

$250

Expiration Days

07/10/2020

THIS IS A DELAYED TRADE FOR EDUCATIONAL PURPOSES ONLY.

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Trade Rationale

With NFLX, I had originally posted a post-earnings $395 - $400 Bull Call Spread as a "continuation trade", but NFLX went up so fast that only few members were able to get in on this trade. After that, I have been waiting to see if I get another opportunity to get into a similar trade. You will notice NFLX has a very strong Support base established at $400. Expecting NFLX to pull all the way back to $400 support line is unrealistic (of course anything can happen in the stock market so take my words with a grain of salt), so I had been waiting for a $400-$410 Bull Call spread opportunity for almost 3 weeks now and we got that opportunity today.

Trade Selection Criteria

Overall market movement

We had a small pullback in the NASDAQ on 6/4, but nothing major.

No Earnings or Significant News

Earnings were just announced on 4/21 and are behind us

Bollinger Bands outside Keltner Channels

Yes, Bollinger Bands are wildly outside the Keltner Channels

RSI Analysis

RSI is pointing up, but this is irrelevant because we are not coming from an oversold situation. (i.e RSI wasn’t below 30 earlier). We used simple Support/Resistance for this trade.

ADX Analysis

ADX is at 21, which doesn’t give us much indication of the trend. Remember ADX should ideally be above 25 to generate reliable results. 

Trade Analysis

All of our members closed this trade today and made 94% ROI in 26 short days.

Trade Outcome

WINNER

Profit/Loss

$235

Beginning Account Balance

$4,100

Ending Account Balance

$4900

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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