Below is a daily chart of Akamai Technologies, Inc. (AKAM), $67.32.
Trade: We recommend buying the stock after 3:30 ET if it is trading above intra-day resistance of $67.60. Note: Option sellers can also sell out-of-the-money puts on this bullish pattern, and/or a bull put spread.
Strategy: Last month it had a bullish gap and run and has since retraced and has been consolidating in a bullish manner. Today it broke out, suggesting higher prices.
Stop Loss: $65.88.
Below is a daily chart of CurrencyShares Euro ETF (FXE), $103.45.
Trade: We recommend selling 10 Dec $101.5/98.5 bull put spread for $.38/share or better (currently the mid-point).
Strategy: Breakout hourly after climactic sell off on longer time frames (with the stronger U.S. Dollar).
Max Gain: Credit received of $380 which is realized if the stock closes above the short strike by expiration.
Max Loss: If assigned, will have a cost basis of $101.12.
Breakeven: $101.12 (short strike price less premium received).
Stop Loss: $102.18.
Adjustments and Comments on Open Trades
DG – Shorted 10 Nov $65/60 bull put spread for $700. Expired worthless for full profit.
M – Shorted 10 Nov $34/30 bull put spread for $600. Expired worthless for full profit.
CVI – Shorted 10 Nov $15/12.5 bull put spread for $850. Expire worthless for full profit.
FSLR – Shorted 10 Nov $35 puts for $580. Got assigned, so sold 10 Dec 32.5 calls for $1,700, converting the position into a covered call.
FB – Shorted 10 Nov $120/115 bull put spread for a limit of $530, plus shorted 10 Nov 115 puts naked for $500. The short 115 puts expired worthless for maximum gain. We rolled the short Nov $120/115 bull put spread to the Dec $115/110 put spread for $1,220.
CF – Shorted 10 Dec 22.5 puts naked for a limit of $.15/share (trading at $.14 x .17). Since the hourly chart is extended, on a hopeful retracement, add two more lots: one for a limit of $.20/share and for a limit of $.25/share to average in.
GPRO – Shorted 10 Nov $14/10 bull put spread on GoPro Inc. for $.76/share. Acting poorly after earnings so will likely get assigned if closes between strikes. If assigned, we recommend selling the Dec $10 calls for $.52 to reduce basis. Stopped out.
TBT – Purchased 1,000 shares at $40.00/share as core trade. With TLT (bonds) strengthening, TBT (yields, which move inverse to bonds) is falling; thus, we recommend selling the Dec 40 calls for $770 to lower cost basis to $39.23/share.
TBT – Shorted 10 Dec $40 puts for $1,400 as income trade.
ESRX – Shorted 10 Dec $72.5 puts for $910. Currently trading at .34 x .35, so move stop to .45 to lock in 50% of max gain if it weakens.
TER – Shorted 10 Jan $24/21 puts (i.e., a bull put spread) for $520.
UNH – Shorted10 Dec $145 puts for $1,750 (core trade if assigned).
UNH – Shorted 10 Dec $140 puts for $850 as income trade. Currently trading at .16 x .23, so move stop to .42 to lock in 50% of max gain if it weakens.
WDC – Shorted 10 Dec $55/50 puts (i.e., a bull put spread) for $430. Recommend closing the short $55 puts for 2 cents, booking $410 of $430 maximum gain, to eliminate any further risk.
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
Founder of The Pristine Method of Trading
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