Mar 2020: BKNG $1200 – $1210 Bull Call Spread

Stock

BKNG

Trade Structure

$1200-$1210 Bull Call Spread

Trade Date

03/19/2020

Price Paid

$530

Expiration Days

05/15/2020

THIS IS A DELAYED TRADE FOR EDUCATIONAL PURPOSES ONLY.
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Trade Rationale

Mar 2020: BKNG $1200- $1210 Bull Call Spread. With the ongoing Coronavirus scare, every single stock including travel stocks like BKNG have been pulling back. With the unprecedented conditions and volatility in the market, we have to tread carefully. With signs popping up indicating that this sell-off may be nearing its end, I am trying out this trade to test the waters. If this goes our way, we will make a profit of $470. BKNG dropped to $1177 after we put on this trade, so this is a great opportunity to get in if you missed the original alert. However, under these conditions I feel like 30 days (which is what I usually do) is not enough for a market recovery, so we are giving it more time. 57 days to be exact. NOTE: The BKNG has earnings on 5/14, so we are falling into the expiration cycle. So, I will be closing this trade at least 10 days before earnings.

Trade Selection Criteria

Overall market movement

We have experience an unprecedented sell-off in the markets due to the ongoing Coronavirus scare

No Earnings or Significant News

We were forced to give this trade 57 days to work in our favor due to the market conditions. However, the next earnings are on 5/15 which means they coincide with our expiration cycle. I will be closing this trade at least 10 days before earnings.

Bollinger Bands outside Keltner Channels

This is a no-brainer! Bollinger Bands are way outside Keltner Channels. 

RSI Analysis

RSI has been in oversold zone for some time. However, it is not showing any signs of a clear reversal yet

ADX Analysis

ADX is flattening out. This indicates that the sell-off is losing strength. Also, DI+ and DI- are finally reversing directions.

Trade Analysis

Analysis will be updated when we close the trade

Trade Outcome

Pending

Profit/Loss

$N/A

Beginning Account Balance

$2,500

Ending Account Balance

$N/A

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