fbpx
‪(720) 819-5927‬ support@25koptionschallenge.com

NOV 2020: STMP $185- $190 Bull Call Spread

Stock

STMP

Trade Structure

$185-$190 Call Spread

Trade Date

11/11/2020

Price Paid

$250

Expiration Days

12/24/2020

THIS IS A DELAYED TRADE FOR EDUCATIONAL PURPOSES ONLY.

To participate in our live challenge and to access our online training, please click “Your Account” and upgrade to the “Live Trader” plan.

 

Trade Rationale

STMP announced great earnings but the stock got punished brutally for that. Another reason why I don't trade earnings as the market's reaction is totally unpredictable. The exaggerated move to the downside was overdone and it caught my attention. I got into a $185-$190 Call Spread, after seeing the first signs of reversal.

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 11/05

Bollinger Bands outside Keltner Channels

Bollinger bands are clearly outside the Keltner Channels.

RSI Analysis

RSI is in oversold zone but still inconclusive. 

N/A

ADX Analysis

DI- is turning downwards indicating that the downward pressure has lost steam.

Trade Analysis

STMP initially went side ways and made us wait until the last week of expiration. Usually, if the stock takes off in your direction, you can close these spreads out in 20 days for your profit target.

Trade Outcome

WINNER

Profit/Loss

$0

Beginning Account Balance

$7,730

Ending Account Balance

$9200

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

Submit a Comment

Your email address will not be published.

Free no-obligation 7-day trial The Bull Run is just getting started...

The massive 5 month long correction is behind us and the Bull run is just getting started. Are you ready to take advantage of it?