Despite the market turmoil the past three weeks, we are pleased to report that the Master Trader Weekly Option Trader has closed 21 straight wins for a total of $7.69 points ($7,690 based on a 10-lot of each recommendation). As always, we will manage opens using Master Trader Strategies and Adjusting/Rolling Strategies.
With the elevated volatility levels in the market (IVR of the VIX is still at 99%), this favors shorting overpriced options (with the charts as always) and/or trades with positive time decay. This should be an incredible week for selling puts/spreads – particularly if we get one more wash out to the downside in the already oversold broader markets.
Below is a daily chart of Nucor Corporation (NUE).
Trade: Over $62.27, consider shorting Feb (2/16) $59.5/55 bull put credit spread (5 DTE) for a limit of $.45/share (spready).
Technical Setup: Pull back to breakout area Minor Support and 200-MA with Bottoming Tail daily.
Option Strategy: Bull Put Credit Spread (BPS), Income Trade with 96% Implied Volatility Rank (IVR).
Stop Loss: $59.48.
WATCH: QCOM is a good candidate for a short Iron Condor; however, it is too illiquid/spready now, but we will watch.
Below is a daily chart of Mattel, Inc. (MAT).
Strategy: Provided MAT opens above $15.95, then short the above BPCS over 10-Min. high.
Stop Loss: $15.94.
Below is a weekly chart of Chevron Corporation (CVX).
Trade: Provided it opens over $112.41, then over 10-min. high consider shorting Feb (2/16) $108/100 bull put credit spread (5 DTE) at mid-point but for a limit of $.60/share (closed at $.72/share).
Technical Setup: Selloff to 200-MA and Support area on +Vol. with Bottoming Tails all time frames.
Option Strategy: Bull Put Credit Spread (BPS). Implied Volatility Rank of 100% (meaning it has the highest volatility over the past year, making it an ideal option selling candidate).
Stop Loss: $107.98.
Below is a daily chart of Carpenter Technology Corporation (CRS).
Trade: Over $47.77, consider shorting Feb (2/16) $45 naked puts (5 DTE) for a limit of $.60/share (spready, closed at $.30 x .80/share).
Technical Setup: Chart above (plus Bottoming Tail on Minor Support after Breakout monthly).
Option Strategy: Bull Put Credit Spread (BPS), Income Trade with 90% Implied Volatility Rank (IVR).
Stop Loss: $45.37.
Below is a daily chart of United States Steel Corporation (X).
Trade: Over $35.40, consider shorting Feb (2/16) $32.5/30 bull put credit spread (5 DTE) for a limit of $.30/share.
Technical Setup: Pull back with double bottom retest daily.
Option Strategy: Bull Put Credit Spread (BPS), Income Trade with 85% Implied Volatility Rank (IVR).
Stop Loss: $32.78.
Below is a daily chart of Electronic Arts Inc. (EA).
Trade: Provided it opens over $119.50, over 10-Min. high consider shorting Feb (2/16) $115/110 bull put credit spread (5 DTE) for a limit of $.70/share (closed at $.78/share).
Technical Setup: Above.
Option Strategy: Bull Put Credit Spread (BPS), Income Trade with 100% Implied Volatility Rank (IVR). NOTE: Higher risk with huge spreads.
Below shows OTM Puts closing prices on 2/9 and order entry on options platform (pick own contract size, of course):
Stop Loss: None now.
Miscellaneous Member Documents and Reminders:
Adjustments and Comments on Open and Closed trades in Master Trader’s Weekly Options Trader. Note: Our Trade Updates are timely posted in a separate Report in the Member’s Area. Please CLICK HERE to see that document for a current reflection on all Open and Closed Trades since the spreadsheet updates immediately and will always be more current than this e-mail update.
Please see Master Trader Guidelines for Trading the Open and Gaps in Member’s Area for rules on trade entry, gaps, etc.
Below is a link to individual videos explaining in greater detail the definitions of the main option trading strategies used by Master Trader in its advisory letters to generate wealth and income.
Description of Master Trader Directional and Income Option Trades can be seen HERE
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Adjustments and Comments on Open and Closed trades in Master Trader’s Weekly Options Trader. Note: Our Trade Updates are timely posted in a separate Report in the Member’s Area. Please CLICK HERE to see that document for a current reflection on all Open and Closed Trades since the spreadsheet updates immediately and will always be more current than this e-mail update.
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To learn how to create Wealth and Generate Income using our simple Option Strategies, please see Master Trader Option Strategies Series for Investors and Active Traders. Our unique approach is guaranteed to increase your ability to trade options with confidence with superior reward-risk that doesn’t take a lot of time.
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All the best,
Greg Capra
Managing Director of Master Trader
Pristine’s Founder and Creator of the Pristine Method
Dan Gibby
Chief Options Strategist
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