5.24 to 1 Risk/Reward Euphoric topping formation (short) + Puts
Buy low sell high, but don't forget to sell high. Its expensive.
This one should be more straight forward, its the final version of this but I may have to edit comments
$10,000 of risk for $55,000 of reward.
The put options intended for this trade are spread between the strike prices below 260 but we will have more details to follow.
I have been waiting to publish this as it would seem too dangerous to short or buy put options in a stock that trades in 4 to 5 point ranges and consistently raises the ceiling nearly every day leading up to and past earnings. The average true range of this stock has been way out of proportion and even though the news has been better than expected it technically looks like one of its prior blow-off tops.
There may not be the right day for this currently, but as of Thursday we might get confirmation of the early signs of a turn-around - that is a bearish reversal signal that is confirmed.
Here is the logic, for a 4-week put option trade it would make sense to get long puts and scatter them through different strike prices from 260 to 240 and hold them into December and January.
We declared this trade at 1000 shares, so that we would first preserve capital by risking at most $10,000 and possibly receive a reward of $55,000. There are no references for past resistance or overhead supply, but we'll take it at 275 being the last possible price point at which someone would be willing to buy this.
The hardest thing is calling the top or calling the bottom, hopefully our patience has paid off and these will be the juiciest puts of maybe even a decade.
This one should be more straight forward, its the final version of this but I may have to edit comments
$10,000 of risk for $55,000 of reward.
The put options intended for this trade are spread between the strike prices below 260 but we will have more details to follow.
I have been waiting to publish this as it would seem too dangerous to short or buy put options in a stock that trades in 4 to 5 point ranges and consistently raises the ceiling nearly every day leading up to and past earnings. The average true range of this stock has been way out of proportion and even though the news has been better than expected it technically looks like one of its prior blow-off tops.
There may not be the right day for this currently, but as of Thursday we might get confirmation of the early signs of a turn-around - that is a bearish reversal signal that is confirmed.
Here is the logic, for a 4-week put option trade it would make sense to get long puts and scatter them through different strike prices from 260 to 240 and hold them into December and January.
We declared this trade at 1000 shares, so that we would first preserve capital by risking at most $10,000 and possibly receive a reward of $55,000. There are no references for past resistance or overhead supply, but we'll take it at 275 being the last possible price point at which someone would be willing to buy this.
The hardest thing is calling the top or calling the bottom, hopefully our patience has paid off and these will be the juiciest puts of maybe even a decade.
Trade active:
It penetrated a portion of the red risk zone but it did not hold, and since it began reversing. Being that AAPL is down 0.96 as I type this indicates that there is a start to this down patterning, we would wait to see if this topping reversal can be confirmed. Details to follow.