Below is a daily chart of United Continental Holdings, Inc. (UAL), $74.71.
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Trade: We recommend selling 10 Mar 78/82 bear call spread (24 DTE) at around current mid-price of $750 or better since extended intra-day.
Strategy: Reversal bar at Major Resistance on daily/weekly charts.
Max Gain: Premium received.
ROI: 23.1% ($750/$3,250 Max Risk).
Max Loss: Cost basis of $78 plus premium received.
Stop Loss: 76.22.
Adjustments and Comments on Open Advisory Letter Trades
SALT – Sold 10 Jun $5 puts for a net credit of $500. Move stop loss at $5.88. Quote now is $.25 x .50 so place GTC limit to close at $.25/share for 50% max profit.
FB – Sold 10 Mar 140/150 bear call spread for $720. It held support in the $130 range so sold 10 Mar 125/120 bull put spread for $650 to convert to a short iron condor and increasing our Max Gain to 1,370. Closing both spreads now (at $.70/share closing mid-point) would lock in $670 gain, so move stop over $135 on the call spread and under $132.50 on the put spread. Notice how time decay and adding the short put spread was a great trade “adjustment” to turn the trade more profitable.
DO – Sold 10 Mar $15 puts for $400. Closed at $.12 x .13 so have over 50% Mas Profit. Move stop loss to $17.18.
EA – Sold 10 Mar $80/75 bull put spread for $370. Bid to close $.05/share and move stop break even.
VRX – Sold 10 Apr $12.5/7.5 bull put spread for $.470. Note: Holding over 2/28 earnings is higher risk. Stop Loss: $12.88.
SPWR – Purchased at $7.89. Note: We are going to approach this as a long-term Core holding because of the bullish alignment of multiple time frames; thus, please note that holding over earnings is higher risk. Target: $11.00 – 14.00. Stop Loss: $12.88.
SWKS – Sold 10 Mar $90/85 bull put spread for $450. Stop Loss: $90.48.
DOW – Sold 10 April $57.5/52.5 bull put spread for $550. Note: Holding over earnings (2/6) is higher risk but we like the stock long term. Stop Loss: $59.98.
XLU – Sold 10 Apr $48 puts for a net credit of $630. Stop Loss: $47.88.
Happy trading! If you have any questions or comments, please e-mail Greg Capra at Greg@mastertrader.com or Dan Gibby at Dan@mastertrader.com
All the best,
Greg Capra
Managing Director and Pristine Founder
Dan Gibby
Chief Options Strategist
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