100% Closing Rate on Last Week’s 6 Credit Spreads
See video below in Open and Closed Trades (which includes lesson on the UTX Iron Condor)
NEW OPTION TRADING IDEAS
Below is a daily chart of SPDR S&P 500 ETF (SPY).
Trade: Over $291.27, consider shorting Sep (9/21) $289.5/284.5 bull put credit spread (5 DTE) for a limit of $.70/share (closed at $.83/share).
Technical Setup: Breakout from 2-day consolidation and Bottoming Tail after gap breakout from Buy Setup on Support and r20-MA daily, bullish and monthly.
Option Strategy: Bull Put Credit Spread (BPCS).
Stop Loss: $289.88.
Below is a daily chart of SPDR Dow Jones Industrial Average ETF (DIA).
Trade: Over $262.47 consider shorting Sep (9/21) $261/256 bull put credit spread (5 DTE) for a limit of $.70/share (closed at $.83/share).
Technical Setup: Bullish 2-day consolidation and Bottoming Tail after Breakout daily and weekly, bullish monthly.
Option Strategy: Bull Put Credit Spread (BPCS).
Stop Loss: $260.98.
Below is a daily chart of PowerShares QQQ ETF (QQQ).
Trade: Over $184.95, consider shorting Sep (9/21) $183/178 bull put credit spread (5 DTE) for a limit of $.60/share (closed at $.72/share).
Technical Setup: Breakout from 3-day consolidation after breakout from Buy Setup on Support and r50-MA daily, bullish and monthly.
Option Strategy: Bull Put Credit Spread (BPCS).
Stop Loss: $183.18.
Below is a daily chart of The Home Depot, Inc. (HD).
Trade: Over $210.53, consider shorting Sep (9/21) $207.5/202.5 bull put credit spread (5 DTE) for mid-point (closed at $.92/share).
Technical Setup: Master Trader Buy Setup and Bottoming Tail after bullish breakout in strong up trend daily chart, bullish weekly and monthly.
Option Strategy: Bull Put Credit Spread (BPCS).
Stop Loss: $207.48.
Below is a daily chart of Automatic Data Processing, Inc. (ADP).
Trade: Over $147.94, consider shorting Sep (9/21) $146/142 bull put credit spread (5 DTE) for a limit of $.40/share (closed at $.52/share).
Technical Setup: Breakout from bullish multi-week above r20/50-MA daily, with bullish weekly and monthly.
Option Strategy: Bull Put Credit Spread (BPCS).
Stop Loss: $146.48.
Below is a daily chart of Kimberly-Clark Corporation (KMB).
Trade: Over $116.50, consider shorting Sep (9/21) $115/112 bull put credit spread (5 DTE) for a limit of $.32/share (closed at $.40/share).
Technical Setup: Breakout from bullish consolidation at 20-MA daily, Master Trader Buy Setup with Bottoming Tail on the weekly.
Option Strategy: Bull Put Credit Spread (BPCS).
Stop Loss: $114.90.
OPEN AND CLOSED TRADES AND ADJUSTMENTS, AND COMMENTS ON NEW INDEX ETF TRADES
100% Closing Rate on Last Week’s 6 Credit Spreads (see above video)
9/10: AAPL – Shorted Sep (9/14) $212.5/202.5 bull put credit spread for $.78/share. Closed at $.05/share for 94% Max Gain in 3 days.
9/10: GD – Shorted Sep (9/14) $192.5/187.5 bull put credit spread for $.42/share. Expired worthless for 100% Max Gain in 4 days.
9/6: HD – Shorted Sep (9/14) $202.5/197.5 bull put credit spread for $.43/share. Closed at $.05/share for 88% Max Gain in 3 days.
9/5: MO – Shorted Sep (9/14) $59/56 bull put credit spread for $.44/share. Closed at $.04/share for 91% Max Gain in 4 days.
9/7: QQQ – Shorted Sep (9/14) $178/172 bull put credit spread for $.62/share. Closed at $.03/share for 95% Max Gain in 5 days.
9/12: SPY – Shorted Sep (9/21) $287/280 bull put credit spread for $.82/share. Closed at $.10/share for 88% Max Gain in 2 days.
Because your success is vital to you – and us.
Before selling options or credit spreads, we urge you to review the valuable and detailed information that we have provided for you in your Member’s Area.
You will find it by scrolling to the bottom of the page to Mastertrader Subscriber Resources.
The link is Money Management Considerations When Selling Option Credit Spreads for Income.
It explains Master Trader Money Management, Trade Management, understanding the use of Contingent Orders, and much more.
If You’re in a Rush to Start
A quick simplified approach to calculating contract size is to simply base your contract size based on the number of shares permitted in your Trading Plan as if you were trading the stock or ETF.
Simple Share Sizing = $ Risk / Stop Loss
The amount of money that you are willing to risk – divided by – the stop loss amount. For example, $100 / .20 = 500 shares
Credit Spread example, if your Trading Plan allowed you to trade 543 shares of AAPL based on the stop loss, then simply round down to the nearest hundred and short an equivalent number of contracts of the option.
Since 1 contract represents 100 shares of the underlying, this would be five (5) contracts.
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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 of Master Trader
Trading the Pristine Method — Origin and End
Dan Gibby
Chief Options Strategist
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Twitter: @GregCapra
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NOTE: Master Trader will show opening and closing prices of all stock and options trades. We recommend that all traders and investors use proper share sizing for positions and money management. However, we cannot recommend what that is for your particular trading style, risk tolerance, or account balance.
We urge you to calculate your own share/position size based on your individualized risk parameters, Trading Plan, and familiarity with the proposed trade strategy and risk. Advanced Management Strategies (AMS) covers in detail foundational and advanced position and money management.
NOTE: Master Trader and its representatives may have existing positions in actual or other trade recommendations before or after suggested herein. Additionally, we may manage them differently for internal purposes based on different risk parameters than noted herein.
All trade ideas and content are for informational and educational purposes only. It is not, nor is it intended to be, trading or investment advice or a recommendation that any security, option or investment strategy is suitable for any person. Trading securities can involve high risk and the loss of any funds. Investment or trading information provided may not be appropriate for all investors, and is provided without respect to individual financial sophistication, financial situation, investing time horizon or risk tolerance. Supporting documentation for any claims (including claims made on behalf of options programs), comparison, statistics, or other technical data, if applicable, will be supplied upon request. Master Trader Consulting, Inc. is not a licensed financial advisor, registered investment advisor, or a registered broker-dealer. Options, futures and futures options are not suitable for all investors. Prior to trading securities products, please read the Characteristics and Risks of Standardize Options and the Risk Disclosure for Futures and Options found here: CLICK HERE.
