The below update was set to go out on Thursday at 2pm, but out mail service did not send or sending today.
It’s likely that most did not see the post in the members area at the time posted there just before 2pm. Assuming that you did not and still have the SPY Puts open, they were higher at the close. After a rebound after the post, the markets later sold off into the close.
I made the post to close the Puts because of the NYSE TICK extreme just before 2pm. You can see the extreme and following bounce in the chart of SPY and TICK below. After prices have been trending for a while and then a TICK extreme occurs historically price will retrace. Recently, the retracements have been large. Thursday the retracement was not as large as they have been recently (what had been working stopped) and likely one of the reasons the markets sold off again into the close
There will be some time decay over the long weekend, but if the market gaps lower Monday those SPY Puts should be even higher. We recommend closing that position on a gap down open.If you closed them at $4.80 that’s a $1500 gain.
There has been some confusion on positions so we wanted to give adjustments on all current ones.
Adjustments and Comments on Open Advisory Letter Trades
SPY -Bought 10 Apr $238 puts for $3.30/share. NYSE TICK Extreme -1000 Close @ $4.80.
XLK – Sold 10 May $54/57 bear call spread at $.43/share. Trail stopped at $.34/share for $90 gain.
XBI – Sold 10 May $71/75 bear call spread for $.59/share. Stopped at $.92/share for $330 loss.
BYD – Bought 10 Bull Call Diagonal as follows: buy Jun $20 calls and selling May $23 calls for $2.05/share. Note: We typically like to leg into BCD but with earnings 4/25/17 and mixed market internals, we want to sell the OTM call immediately to generate some time decay and lower cost basis of long call. Stop Loss: $20.28. BYD looks like selling hit it because of market selloff. Note: earnings 4/25/17 so holding at that is higher risk.
GNK – Bought 1,000 shares of stock at $14.40 and another 1,000 shares at $13.84/share for an average cost basis of $14.12. Note: Earnings are 5/8/17 (estimate) so higher risk holding through it. Target: A very aggressive $30.00 – 50.00. Stop Loss: $11.48.
CME – Sold 10 Apr $119/123 bear call spread at $.75/share. Stop Loss: $120.12. Change to 117.2 above Thursday’s high
PIR – Sold 10 May $6 naked puts for a limit of $.25/share. Stop Loss: $6.38. Bid $.25 to close break even since not acting right.
FB – Sold 10 Apr $143/146 bear call spread for $.34/share. Stop Loss: $142.52. – Change to 140.60 above Thursday’s high
TLT – Sold 10 May $119/114 bull put spread for $.59/share. Stop Loss: $119.88.
HD –Sold 5 May (5/5 weekly) 150/155 bear call spread for $.68/share. Under $146, we recommend selling another 5 lot at mid-point. More aggressive traders can add under today’s low. Stop Loss: $150.22. – Change to 148.52
LOW – Sold 10 May 85/90 bear call spread for $.32/share. Stop Loss: $84.22. Change to 83.22
AMZN – We recommend selling 10 Apr 925/935 bear call spread (8 DTE) for mid-point (currently $.84/share). However, it gapped under entry, and didn’t trade under the 5-Min. low, and now the desired net credit too low if triggers, so cancel trade.
QQQ – Last night, we said “Under $130.78, we recommend selling 10 May 134/138 bear call spread (36 Days to Expiration (DTE)) for mid-point (currently $.74/share).” However, it gapped under the entry which requires us to use a 5-Min. low as the new entry provided the gap is not too excessive. Please see our Trading Rules in the Member’s Section. Stop Loss: $133.52. At the 10 ET Update, we said “Still a go under $130.66” since if that triggered, it would be bearish.
Please be sure to read our Master Trader Guidelines for Trading the Open and Gaps
Published in the Member’s Section. Among other things, it provides:
Triggers at Market Open.
Never trade in first five (5) minutes after market open (this includes entering new trades or taking stops). Thereafter, use the 5-Min. high/low as the revised entry point for new bullish/bearish trades, provided the security has not moved over 10% of its intended Target. For stops which trigger within the first five minutes, use a 5-Min. low/high for bullish/bearish positions.
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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Twitter: @GregCapra
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