Wednesday, February 5, 2020

Feb 5 Trades


Today I closed five trades including an spx 0 DTE (zero days to expiration) and all were winners. The first trade  was  SPX 0 DTE trade based the modified bollinger bands strategy  on 5 min candles, and the three trade were on NXPI, MSFT, and NFLX based on the same modified bollinger bands strategy but on daily candle, and a UAL trade based on the IV rank and technical analysis of the chart. In this post I will try to explain the strategy used for these trades, and the same strategy that I use to share my trades on the free whatsapp group that I have which is open to anyone who would like to join.

Trade 1: SPX 0 DTE trade

In short for the modified bollinger bands strategy, I scan spx on a 5 min candles for 5 closes below or above a modified bollinger band of standard deviation of 0.382 a well as the 50 SMA. 

At 11:11 am central time, SPX 5 min candles came up on my chart by showing 5 closes on the 5 min candles above the modified bollinger bands and 50 sma. 

So I placed the trigger above the highest of these candles and at 11:16am the trigger triggered so I entered a put credit spread  and I sent out an alert on the whatsapp group.

On these kind of trades on the 0 DTE spx trades I like to take profits at 50% and go on to the next trade so when we entered we collected 0.65 on the PCS and I set a GTC order at 0.3 (in the image it says 0.35 it is typo in the image) with our stop loss being three times the credit received so in this case 1.95.

Today around 1:43pm SPX  went up in price and our profit target was hit and we closed the trade for 50% profit and we sent the alert to the whatsapp group that we closed it in case anyone was following it thus making a profit of $35 profit per contract. 




Trade 2,3,4: NXPI, MSFT, and NFLX trades

In short for the modified bollinger bands strategy, I scan everyday the stocks for 5 closes below or above a modified bollinger band of standard deviation of 0.382 a well as the 50 SMA. 

On January 13, NXPI came up on my scanner by showing 5 closes on the daily candles above the modified bollinger bands and 50 sma. 

On January 14 the trigger above the highest of these candles triggered so I entered a put credit spread and I sent out an alert on the whatsapp group.

On February 3, NFLX, and MSFT came up on my scanner by showing 5 closes on the daily candles above the modified bollinger bands and 50 sma. 

On February 4 the trigger above the highest of these candles triggered so I entered a put credit spread and I sent out an alert on the whatsapp group.


On these kind of trades I like to take profits at 25% and go on to the next trade and our stop loss is two times the credit received as you can from the images below how much we collected and how much we paid to exit the trade and keep the profit. 



  
Profit on NXPI trade is $35, NFLX trade is $40, and on MSFT trade is $38 per contract. 

Trade 5: UAL Trade

On January 30 UAL has extremely high IVR at 94 and no earnings in the way. You don't see that often. So, it's attracting us to make a trade in here.

With such high IVR and such an aggressive down move it showed on January 30 -- a jolt higher in price would bode real well for a short put spread. We would get the directional move we need, and also a nice contraction in volatility at the same time. That should help the spread decay nicely.

I decided to take a Put Credit spread with sell strike at 172.5 and buy  strike at 67.5. I need price to stay above is 72.50. UAL was trading at 75.21. So I still have a little room to the downside for UAL to move. That's what makes this more of a neutral to bullish bet, rather than strictly bullish. This increases my POP on the trade compared with say the 75/70 short put spread.

Today I closed my PCS in UAL for over 50% of my max gain in barely 6 days! Really nice and quick trade here. That's the nice thing about spreads is that we can get paid quickly IF (a big if) we get that directional move we are looking for, as we did with UAL. IV rank today was  77. Total profit on the trade $74 per contract. 





Total Profit for Feb 5 2020 profits:

Trade 1: $35
Trade 2: $35
Trade 3: $40
Trade 4: $38
Trade 5: $74


Total: $222 per contract.

Total February Trades Profit/Loss: $82 per contract.

Hope this blog helps you find profitable strategies and in case you want to follow my trades please join the whatsapp group