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Nov 2019: AAPL $257- $247 Bear Put Spread

Stock

AAPL

Trade Structure

$257.5- $247.5 Bear Put Spread

Trade Date

11/06/2019

Expiration Days

12/06/2019

Trade Rationale

With stock market ripping upwards and making new all time highs for days, every stock in my watchlist is shooting to the moon. Although, AAPL earnings were great, it is way past that point for the stock to keep going up. The market is due for a correction, and I bought a $257 - $247 Bear Put Spread for my mean reversion trade. I paid $366 for this trade and have the potential to double it if AAPL expires at or below $247

Trade Selection Criteria

Overall market movement

With S&P 500 making new all time highs, the overall market and practically every stock in my watchlist is making new highs. With the first signs of a loss in upward momentum, it is a great time to put on some mean reversion trades

No Earnings or Significant News

Earnings are behind us and were announced on 10/30. There is no significant news or earnings event during our trade cycle.

Bollinger Bands outside Keltner Channels

Bollinger Bands are outside Keltner Channels. We are not in a squeeze or low volatility period.

RSI Analysis

RSI is curving downwards after being in overbought zone for some time. RSI has still not gone below the 70 line though, so we are jumping in slightly prematurely.

ADX Analysis

ADX is flat, indicating that the previous upward momentum has lost its strength.

Trade Analysis

Analysis will be updated, when we close the Trade

Trade Outcome

Pending

Profit/Loss

$N/A

Beginning Account Balance

$16,100

Ending Account Balance

$

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