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Putcreditspread

QQQ 336/332 Put Spread (Mar 7)This was an order that I had input this morning when going through the my broad market charts. Reasoning is below: 1. Clear support at 352.75 (White line) 2. Long term bullishness on equities, especially if inflation continues. Caveat to this is that with rising rates I do think Tech will feel the pain more than other names. As such this position is 1/2 my usual size. 3. Yellow line (338) identified as recent low, and middle of a lower trading range from Apr / May. Yellow line then acts as target for the short leg. I.e if I take this trade, the short leg must be below this. As such, I found the 336/332 spread that paid 10% Return on Margin (or risk) and was below my target. Set the order this morning and it filled a few minutes ago as the market came down a bit. Questions, Comments, Leave em below!
NASDAQ:QQQLong
by ThetaTrades
42
PYPL Weely Options PlayDescription PYPL moving up into the gap that was created following the earnings release. Not all gaps will be filled, but they give a good clue as to how supply and demand will play out. I would typically put on a call credit spread for a long position, but this low volatility, lethaly-injected environment lends to being a seller of options. I am also "hedged" with plenty of long options in case anything goes haywire. Put Credit Spread By Expiration Max loss occurs at any strike under the long put (207.5) Max gain occurs at any strike over the short put (210) SL < 210 *Stops based off underlying stock price, not mark to market loss The Trade BUY 11/19 207.5P SELL 11/19 210P R/R & Breakevens vary on fill. Looking to make 26% return on collateral by EOW. The short put is placed under the opening bar following the post-earnings gap The long call is placed 2.5 points away IAW collateral requirements, risk tolerance, and R/R. Manage Risk Only invest what you are willing to lose
NASDAQ:PYPLLong
by BarnardR
SPY play with 90% PoP!Hello, guys hope all is well. Today we will be looking at $SPY and how I will play the market this week. Based on the expected move for this week of $6.79 we are possibly looking at a range between $410.01 - $423.59. On Monday I opened the Put side ($400 / $398 and collected $9 per contact) of my Iron Condor and leg into my Call side roughly Thursday afternoon or right before close. Last week we saw a slight dip in the markets from Monday's open of $424.43 to Friday's close of $414.92. This 2.24% drop has made the $VIX pop to the $20 levels from the mid to high teens. With this pop, we will be able to take advantage in one of two ways. 1) We can keep our stricks the same as we did last week because we still believe that there is a lot of supply at this price and we want to collect more premium. 2)We will be able to get lower on the put side/higher on the call side while still collecting the same amount of premium as we did last week. I will be going with the second option because although there may be supply at these levels I still want to sell the .10 - .05 deltas with a $2 widespread. I'll be looking to collect between $8-$10 per contract on the put side give me roughly a 4% gain while also looking for the same percent gain on the Call side later on in the week. Since no additional collateral is needed to add the Call side, we are looking at a minimal gain of 8% if we stay in our expected range.
AMEX:SPY
by zzMOTTS
What’s The Best Vertical Spread Option Strategy?I’m Markus Heitkoetter and I’ve been an active trader for over 20 years. I often see people who start trading and expect their accounts to explode, based on promises and hype they see in ads and e-mails. They start trading and realize it doesn’t work this way. The purpose of these articles is to show you the trading strategies and tools that I personally use to trade my own account so that you can grow your own account systematically. Real money…real trades. What’s The Best Vertical Spread Option Strategy? You may have previously heard someone say, “ Vertical spreads are the same as getting weekly paychecks! “ Is that even true? We’re going to go in-depth on each strategy to discuss each of the pros and cons. I’m also going to discuss how each strategy should be used in any given market condition. Since we’ve previously discussed credit spreads and debit spreads, you’re probably wondering… what’s the BEST vertical spread option strategy? Let’s break down each of the vertical spread option strategies in detail and look at examples in Tasty Trade. Call Debit Spread What is a Call Debit Spread? A call debit spread is a position in which you buy a call option and sell a call option at different strike prices using the same expiration date. When should this strategy be used? This strategy is used when you believe the stock is increasing in price, but not a dramatic movement. What are the benefits of this strategy? Trading this position can potentially reduce the overall cost associated with taking on the trade. This type of strategy also reduces the break-even price of the trade. When does this trade lose money? When the underlying stock moves sideways or downward. What is the max risk for this trade? The max risk associated with this strategy is the cost of the premium paid to take on the trade. What is the max reward for this trade? The max reward for this strategy is the difference between the strike price of the two calls, multiplied by 100. Minus the premium paid to take on the trade. Call Debit Spread Example - Reduced Margin Requirement: $910 - Max Risk Reduced: $910 - Max Reward: $4090 Put Debit Spread What is a Put Debit Spread? A put debit spread is a position in which you buy a put option and sell a put option at different strike prices with the same expiration date. When should this strategy be used? This strategy is used when you believe the stock is decreasing in price. What are the benefits of this strategy? Trading this position can potentially reduce the overall cost associated with taking on the trade. This type of strategy also lowers the break-even price of the trade. When does this trade lose money? The underlying stock moves sideways or downward. What is the max risk for this trade? The max risk associated with this strategy is the cost of the premium paid to take on the trade. What is the max reward for this trade? The max reward for this strategy is the difference between the strike price of two calls, multiplied by 100. Minus the premium paid to take on the trade. Put Debit Spread Example - Reduced Margin Requirement: $910 - Max Risk Reduced: $910 - Max Reward: $2090 Call Credit Spread What is a Call Credit Spread? A call credit spread is a position in which you sell a call option and buy a call option as protection. These option contracts have different strike prices but have the same expiration date. When should this strategy be used? This strategy is used when you believe the stock is decreasing in price or trading sideways. What are the benefits of this strategy? Trading this position produces a credit from the premium received for selling the put option. Buying the additional call option provides protection, limiting the risk of the trade. When does this trade lose money? This trade loses money when the underlying stock moves up quickly past your strike price. What is the max risk for this trade? The max risk associated with this strategy is the difference between the strike prices, multiplied by 100. What is the max reward for this trade? The max reward for this strategy is the premium received for selling the call option, minus the premium paid for protection. Call Credit Spread Example - Margin Requirement: $965 - Max Risk: $965 - Max Reward $35 - Premium Received: $35 Put Credit Spread What is a Put Credit Spread? A put spread is a position in which you sell a put option and buy a put option as protection. These option contracts have different strike prices but have the same expiration date. When should this strategy be used? This strategy is used when you believe the stock is increasing in price or trading sideways. What are the benefits of this strategy? Trading this position produces a credit in the form of the premium received for selling the put option. Buying the additional put option provides protection, limiting the risk of the trade. When does this trade lose money? The underlying stock moves downward sharply. What is the max risk for this trade? The max risk associated with this strategy is the difference between strike prices, multiplied by 100. What is the max reward for this trade? The max reward for this position is the premium received for selling the put option, minus the premium paid for protection. Put Credit Spread Example - Margin Requirement: $837 - Max Risk: $837 - Premium Received: $163 - Max Reward: $163 How Do I Choose The Best Vertical Spread Option Strategy? I personally only select options that match my trading plan. You’ve probably heard me say it a million times if you’ve heard it once… There are 3 things you need to know to be successful at trading. 1.) You need to know which options to trade 2.) You need to know when to enter 3.) You need to know when to exit I use the PowerX Optimizer to help me execute these trades successfully.
TVC:NDQEducation
by rockwelltrading
FDX - Hovering near key area of support/resistanceFedEx NYSE:FDX is hovering near a resistance area which it had previously broke prior to the start of the new year. However, in recent weeks, FDX has since fallen below that key level and appears to be retesting it. Just a few days ago, it tested the $255 area but failed to break through it. It appears that FedEx is trying to push past this area again. We will keep our eyes on it as time progresses. Fed EX is currently trading 16% below it's recent highs. REMEMBER: Reference to specific securities should not be construed as a recommendation to buy, sell or hold that security. Specific securities are mentioned for educational and informational purposes only. YouCanTrade is an online media publication service which provides investment educational content, ideas and demonstrations, and does not provide investment or trading advice, research or recommendations.
NYSE:FDXLong
by UnknownUnicorn6775423
PAYC - Potential Bullish Pivot What's going on traders? Hope you all had a Happy season. Today, we are looking at Paycom Software NYSE:PAYC and it looks as if it had a nice correction in price recently. The stock was trading at a recent high of $471.08 before dropping nearly 13% to 411.13. That area also lines up with previous resistance areas which could be acting as support now. Since then the stock has crossed above the lower Keltner channel (represented by the white dot on the chart) and might be resuming it's trend upward. We will continue to watch PAYC to see if it does move higher over the next few weeks. REMEMBER: Reference to specific securities should not be construed as a recommendation to buy, sell or hold that security. Specific securities are mentioned for educational and informational purposes only. YouCanTrade is an online media publication service which provides investment educational content, ideas and demonstrations, and does not provide investment or trading advice, research or recommendations.
NYSE:PAYCLong
by UnknownUnicorn6775423
DHR - Which way is it going?Danaher corporation NYSE:DHR is looking like it wants to break out but it has been caught between the 8 and 21 EMA for about 5 days. We know that price does not stay in a consolidated area forever, but can take its sweet time before it decides to move. Currently, the price for DHR is $225 per share, which is between the upper and lower Bollinger bands. The upper Bollinger band is near $233 while the lower Bollinger band is near $217. The question remains...which way will it go? Backing out to a weekly timeframe, DHR has been in an uptrend and is pulling back to the 8 EMA on the weekly chart. It has seen good support from pullbacks to this area in the past...however as always, past performance does not indicate future results. We simply use the past to get an idea of what could happen and where to set our stops in case it doesn't play out as expected. So based on the weekly chart, we are seeing a strong uptrend showing a pullback, and on the daily chart pictured above, we see that price is consolidating to break out. My guess is that the stock will try to push higher and will try to break above the upper Bollinger band as we head towards the New Year. REMEMBER: Reference to specific securities should not be construed as a recommendation to buy, sell or hold that security. Specific securities are mentioned for educational and informational purposes only. YouCanTrade is an online media publication service which provides investment educational content, ideas and demonstrations, and does not provide investment or trading advice, research or recommendations.
NYSE:DHRLong
by UnknownUnicorn6775423
TMO - Bullish Price ActionTMO has broken through the 8, 13, and 21 daily exponential moving averages in the past few trading sessions. As a leader in laboratory diagnostics and life science sales distribution, it would seem reasonable that the stock may try to push higher as the coronavirus cases continue to grow. Now that the stock has pushed passed the 21 day EMA, there are no foreseeable areas of resistance for the stock and could make its way back up to recent highs nearing $530 per share. I would anticipate a slight pullback towards the 21 day EMA as stock rarely blast higher without some consolidation, but I would say that I am overall bullish on this stock until we reach previous highs. REMEMBER: Reference to specific securities should not be construed as a recommendation to buy, sell or hold that security. Specific securities are mentioned for educational and informational purposes only. YouCanTrade is an online media publication service which provides investment educational content, ideas and demonstrations, and does not provide investment or trading advice, research or recommendations.
NYSE:TMOLong
by UnknownUnicorn6775423
Apple - Bullish Trade before earnings?Two indicators that I use show AAPL is giving off bullish signals just before they report earnings today. Let's sit back and see what happens as they are expected to report earnings today at 4:00PM ET. Stochastics are showing Oversold and have begun crossing over, which is a bullish indication that price could be shifting directions. Secondly, my studies show that we have a pivot point which means that price has crossed above the lower Keltner channel after having been between the lower keltner and Bollinger Bands. Let's see how Apple's stock opens up tomorrow.
NASDAQ:AAPLLong
by UnknownUnicorn6775423
1
Salesforce.com - Potential Bullish PivotHey Traders! Salesforce.com NYSE:CRM has been on my radar today and according to my studies... CRM is giving off a strong bullish signal according to where the price is relative to the Bollinger bands and Keltner channel. I drew a few dots on the chart above to highlight the areas of interest so you can see what I look at. The Cyan dot is just to locate the price when it is between the lower Bollinger bands and Keltner channel, this is the area where I start paying attention for a bullish trade setup. The Magenta dots are for when the price is between the upper Bollinger bands and Keltner Channel bands and is when I start looking for a bearish trade setup. I use the white dot as an entry signal as price has come back within the Keltner channel. White dots following the cyan dots are bullish entry signals, whereas white dots following magenta dots are bearish entry signals. The entry signals are what I consider to be pivot points where the stock may begin to change direction. However, this strategy does generate false positive signals from time to time. As an attempt to avoid false entry signals, I take into account the trend of the stock. The stock has been trending upward the last 90 days with a net change of +33% (based on closing price 06/19/2020). Therefore, based on the indicators and trend, my assumption is that CRM could move higher. Ideally, I would like to see CRM reach $260 per share within the next 14 trading days... but who knows what could happen. Keep in mind: The days surrounding the outcome of the U.S. election, market fluctuations, and unexpected news events can send CRM in an unfavorable direction. This idea is not a call to action, nor should it be considered investment or trading advice. The ideas expressed on our TradingView page are for educational and entertainment purposes only. Leave us a comment below! - Are you bullish or bearish on Salesforce.com?
NYSE:CRMLong
by UnknownUnicorn6775423
Netflix is nearing a pivot pointHey traders, so Netflix NASDAQ:NFLX has been dropping the last 6 sessions and has fallen into one of my favorite areas for catching a pivot trade. Basically, the strategy here is to wait for Netflix to pop above the lower Keltner channel after being in between the lower Keltner and Bollinger bands before taking any long trades. Price still could move towards the lower Bollinger Band, so we need to be patient and not rush into a bullish trade, unless you are ok with having some drawdown, which I am not. I trade options, so I try to wait as long as possible before the pivot happens because theta decay eats up the long call position if I get in too early. If you are buying the stock, the passing of time will not hurt your stock position. On my trading platform, I wrote an indicator that automatically plots cyan dots whenever price is between the lower Bollinger Bands and Keltner channel, and then it plots a white dot once price crosses above the lower Keltner channel. I manually drew an example of what that looks like on the chart above. So now that you know what I am waiting for, I'll tell you a couple of things about this strategy. Sometimes, the move I am waiting for ends up happening in between sessions. For example, if tomorrow NFLX gaps up and opens near the upper Keltner Channel, I wouldn't take the trade because the move I was hoping to capture with the long call already happened. I am looking to ride the long call as the stock steadily moves itself across the Keltner channel until it reaches the upper Keltner or Bollinger band. Another thing that could happen, is price could fall past the lower Bollinger band. If that happens, it invalidates the trade (at least for me it does) and I would wait for the price to come back between the lower Bollinger band and Keltner channel so that I'll be ready to try again it crosses above the lower Keltner channel at that time. Note for Options Traders: I usually try to buy calls with this setup, but I almost always experience a period of sideways movement which end up hurting the long call. To avoid the negative effects of theta decay, you can substitute the long call with a put credit spread since put credit spreads benefit from theta decay making them cheaper to buy back.
NASDAQ:NFLXLong
by UnknownUnicorn6775423
2
Biogen - Pivot Point - Beware EarningsHey traders, I was searching for potential pivot points for long call opportunities and I came across Biogen NASDAQ:BIIB and thought to myself "Hey! This looks good!"... that is until I saw they're expected to report earnings tomorrow. But otherwise, take a look at the chart above. One thing you will see...is that its been trading within a range. I highlighted this range on the chart using the labels Support and Resistance. The other thing to notice is where the stock price is relative to the Bollinger Bands. If earnings wasn't tomorrow, I would be more inclined to purchase a call here because the stock price is holding at the lower BollingerBand at 2 standard deviations. Stock price has a tendency to move back towards the 8 EMA on the daily chart above, so if we are playing the odds, this trade would be in favor to the upside. But this trade is invalidated since we have a major news event happening tomorrow. So... let's see what happens. In my experience, if a stock breaches the lower Bollinger Band after an earnings report, it's no longer a valid long call trade. In the past, I have made the mistake in thinking with 2 standard deviations... I have a 95% chance that price will fall back within the BollingerBands within the lifespan of the trade. But often what ends up happening is the stock price moves in a "L shaped" pattern where the vertical end of the "L" is the drop after the major news event and the horizontal side of the "L" is the sideways price action the stock experiences for days ( sometimes weeks ) following the news event. In this situation, the stock usually comes back within the 2 standard deviation range... but not until Theta decay has eaten up your call option's premium. So even if you eventually get the direction right, time will not be kind to your long call position. This is where applying the Put Credit Spread strategy comes in handy. With Put Credit Spreads, you are an option seller, rather than an option buyer. Time will erode the premiums of the spread making it cheaper to buy back later. What's even better, is if the stock moves up... then the Delta will negatively affect the puts making them cheaper to buy back. Anyways, let's follow Biogen tomorrow and see if they beat or miss earnings and how the stock price reacts to the news. If it heads lower, we'll follow up in next weeks idea regarding the put credit spread setup.
NASDAQ:BIIB
by UnknownUnicorn6775423
CVX breaks 13 Day EMA and heads for the 21 Day EMAMuch like most stocks, Chevron NYSE:CVX didn't have a good month of September this year, but it looks like things might be turning around. Looking at the daily chart above, CVX, as been trying to break past the 8 EMA average throughout the last month but found little success until yesterday. Today the price broke through the 13 day EMA. As the stock heads towards the 21 day EMA, one of two things can happen. It can pull up to it and continue down or it breaks past the 21 day EMA and continues going up. Rather than trade directionally, option traders should consider selling put credit spreads. Although this way cap the upside, it also limits your downside .
NYSE:CVXLong
by UnknownUnicorn6775423
Target - Pullback tradeThe markets have been selling off over the past few days, leaving most of the sectors in the S&P 500 in the red. A stock that caught my eye today was Target. The discount store's stock prices have been trading near it's 21 day exponential moving average only dipping beneath it temporarily throughout intraday trading sessions. Despite the warning signs of what could be another big sell off, I choose to remain bullish on TGT and consider this to be a pullback trade setup. Of course, we might see price dip below the 21 as it has in the past...but that doesn't seem to be more than a day or two. If it does... then consider the possibility that Target is reversing rather than pulling back. Options speculators should consider the chance of a broad market selloff and at think about using spreads rather than directional plays. If you are trading the stock, plan your trade and trade your plan. Only you know what you can afford.
NYSE:TGTLong
by UnknownUnicorn6775423
Applied Materials - Bullish pullback trade ?Applied Materials ( NASDAQ:AMAT ) has an interesting chart in that it tends to pull back below the 21 EMA on the daily chart. I tried to identify a clear area of support for each pullback, but it seems arbitrary. You can see the Keltner Channel falls just short of where the stock reverses the second time and the most recent pullback is actually pulling back to the 34 EMA which I initially did not want to put on my chart to avoid too many lines... but I figured, seeing is believing, so I put a big fat orange line to add to the chart. AMAT is an upward trending stock and has decent volume...approx 5 million shares traded today...I sorted the S&P 500 constituents by volume and AMAT was #19 in volume (#1 being highest volume which was GE). I did see other stocks that were pulling back as well, but something about their charts didn't convince me. OK prediction time... so based on what I see on the charts I think we might see AMAT find support at $62.65 ... from there I think its going to ride back up. It is oversold based on the 60 min time frame, but not quite there on the daily time frame... so keep an eye on it tomorrow. If it comes down to $62.65 or to the lower Keltner channel band I wouldn't be surprised... but be wary if it breaks below that. Those considering to go long now, might be a little early...or could be lucky and end up hitting it right on the nose because it doesn't tend to stray too far below the 21 EMA and today's red candle was a decent size.
NASDAQ:AMATLong
by UnknownUnicorn6775423
Clorox (CLX) - Catching the PivotAs mentioned before, Clorox ( NYSE:CLX ) has been one of those steadily rising stocks that appear to be benefiting from the Coronavirus. Logically, it makes sense that a company like Clorox would do well during a time where sanitation is of the utmost importance. It's not surprising to see that CLX is on the rise, however, even rising stocks need to take a breather once in a while, catch their breath, and then continue on their path. Usually, I use the 8, 13, and 21 EMAs to locate potential pullback trades, however, this particular stock seems to gravitate more accurately to the lower Keltner band before pivoting upwards. I have marked other pivot points with white arrows that confirm CLX has bounced in the past in relation to the lower keltner channel band. As always past performance does not indicate future results. I reduced the opacity on my EMAs so you can see the Keltner channel lines more clearly, putting less strain on the eyes. Nothing like a chart full of lines to put your mind into analysis paralysis. My guess here is CLX might find support as it has done in the past at the lower Keltner channel and continue moving upward with its current trend. Therefore, I will flag this idea as bullish and see what happens.
NYSE:CLXLong
by UnknownUnicorn6775423
Starbucks (SBUX) - Hangs Around 21 EMAAs you all know, I regularly post pullback trade ideas as stocks pullback to their 21 day EMA. Today, I am looking at Starbucks NASDAQ:SBUX . What's different about this pullback is that Starbucks usually doesnt hang out at the 21 for more than a day or two. However, its been 4 days... so I wonder if the powers that be are on to us! ... just kidding. But in all seriousness, I like this chart. I think that it really shows that support at the 21 EMA is being tested hard and should SBUX close the day out above the 21 EMA or even the 8 EMA on the daily chart (putting it in the Green), then I think next week we could see SBUX go even higher.
NASDAQ:SBUXLong
by UnknownUnicorn6775423