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NOV 2020: SHOP $900 – $910 Bull Call Spread

Stock

SHOP

Trade Structure

$900-$910 Call Spread

Trade Date

11/09/2020

Price Paid

$500

Expiration Days

12/18/2020

THIS IS A DELAYED TRADE FOR EDUCATIONAL PURPOSES ONLY.

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Trade Rationale

SHOP is a huge mover. Price changes of $100 - $150 in a day are normal. Even after good earnings, it dropped all the way down to $900 levels, before reversing back up to $1050. Since, Nasdaq has been under pressure due to an apparent sector rotation, SHOP gave us another opportunity today at the $900 support level. As you can clearly see, the $900 level is very well established support for SHOP which prompted me to take this trade.

Trade Selection Criteria

Overall market movement

Nasdaq has been under pressure for last 2 days causing a massive sell-off in all tech stocks

No Earnings or Significant News

Earnings are behind us and were announced on 10/29

Bollinger Bands outside Keltner Channels

Bollinger bands are clearly outside the Keltner Channels.

RSI Analysis

RSI is inconclusive. This trade was taken based on Support & Resistance levels.

N/A

ADX Analysis

ADX is inconclusive. This trade was taken based on Support & Resistance levels.

N/A

Trade Analysis

Once in a while you get these picture perfect trades and SHOP was definitely one of them. SHOP just went in my direction almost immediately and I was able to close the trade for a 90% profit target in 20 short days.

Trade Outcome

WINNER

Profit/Loss

$450

Beginning Account Balance

$7,700

Ending Account Balance

$8300

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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