May 2020: AAPL $290 – $295 Bull Call Spread

Stock

AAPL

Trade Structure

$290 - $295 Bull Call Spread

Trade Date

05/01/2020

Price Paid

$250

Expiration Days

06/05/2020

THIS IS A DELAYED TRADE FOR EDUCATIONAL PURPOSES ONLY.

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Trade Rationale

May 2020: AAPL $290 - $295 Bull Call Spread. This is a post earnings trade. Earnings causes a reset in the stocks momentum and direction. One has to respect the market's post earnings reaction as these reactions are there for a reason. It accommodates the unknown news before the earnings and reflects that into the stocks new price. These trades are always continuation trades (i.e you have to trade in the direction of the market's reaction). They are not the usual mean reversion trades I usually do. Because of this you will notice that none of my usual indicators apply here.

Trade Selection Criteria

Overall market movement

We are experiencing unprecedented volatility in the markets due to the ongoing Coronavirus scare. We put on this trade when DOW dropped 622 points on Friday.

No Earnings or Significant News

Earnings were just announced and there are no future earnings or binary events within our trade cycle.

Bollinger Bands outside Keltner Channels

N/A – For post earnings trade my regular indicators don’t apply.

RSI Analysis

N/A – For post earnings trade my regular indicators don’t apply.

ADX Analysis

N/A – For post earnings trade my regular indicators don’t apply.

Trade Analysis

This post earnings trade, worked out perfectly. We made a 94% return on investment in 27 short days.

Trade Outcome

WINNER

Profit/Loss

$235

Beginning Account Balance

$3,200

Ending Account Balance

$4000

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