Options Trading Newsletter - Issue #184 Options Today - Imbalance Iron Condor NVDA
What next...
What Next…
The FOMC cut has been decided. J.Powell awarded the market with a 50 bps cut. Should we rejoice or should we panic because a larger cut would mean the economy is not in a good shape. Regardless of what follows next, we would only trade our way based on the price action. Exiting the market fully may result in loss in upside if the bull run continues. Staying fully in market may result in a big loss if market crashes.
Whichever action you take, do use options strategy to protect your positions. Buying protective puts may be a way to protect your longs in case of a fall in the market. Selling calls on your longs to finance the protective puts is another way (note you will cap your upside if market goes up instead and will only have protection to the level of puts purchased). I recall doing a video sometime ago on how to Hedge For Free. Perhaps this would come in handy in volatile and uncertain market like this. Do watch it and share with friends the idea if it works for you.
Tiktok failed to load.Enable 3rd party cookies or use another browser
ES (5762)
ES went up 132 points (1.32%) last week. The Federal Reserve has cut 50 bps on Wednesday FOMC meeting which started the cut cycle. The market sold off however on Wednesday after Jerome Powell speech but it had a full recovery the next day creating a new high at 5797.
We now have broken the previous high in July of 5721 and now into a new higher high structure from the August top structure. As of now, the structure remain bullish until it breaks below the levels of 5650. It is likely that it can come to this level as the gap up last Tuesday of 5641-5755 could be filled as the next level down.
Trading range for the week is 5650 to 5850.
NQ (20028)
NQ was up 498 points (2.55%) last week. It did not break previous high like the ES but had broken the previous high 20025 of 22 August. Is just stayed few points above it. It is now in the bottom part of the green box zone, if it stays above 20025 we could see it going for the next level up of 20597. Retracements level could be finding support at 19000 area.
As there could still be some rate cuts coming into December, NDX could continue to remain bullish. However, as we are near the previous high, we need to be nimble as any retracements could come in hard, fast and unexpected. We would cautious you to put in some hard stops on your long term long positions and move them up as the market continue to run up. If it falls, you will have a fallback to your x% risk appetite (7-10% possibly).
Trading range for the week is between 19600 to 20600.
HANG SENG INDEX (18258)
HSI had a good run last week, up 889 points (5.12%). It broke all our target resistance 17800 first and 18200 second. It closed 18,258 on Friday after it topped 18,335 level.
We took profit on our longs between 17,800-18,200 levels. As we see now, HSI remain bullish as it had broken 18,202 previous high and working out a higher high, higher low structure which would bring in more participants into the market with the next pullback. Support remain now at 17,600 levels. We would look for pullback opportunities before going long again.
Resistance now at 18,700-18.800 levels.
OPTIONS TODAY - IMBALANCE IRON CONDOR NVDA
NVDA has been trading in a range since the past 2-3 months. We feel it might continue to do so without further catalyst to push it up to break all time high. It’s performance going down below the split price of around $120 may also deter new entrants into this stock in fear that it could not hold the price up. Market wise is now almost to its top with S&P breaking new highs and Nasdaq following behind close to previous high, so there may be possibility of further runup but would somewhat retrace even if it does in the next few weeks. On the basis of this, we would want to do a slightly bearish iron condor. Yes, an Iron Condor need not be fully neutral, we can adjust the delta of the short strike or the width of the strikes to make it slightly directional.
Trade Entry (DTE 15 Nov)
Expected move for 15 Nov, 53 days expiry is +/- 17. NVDA is now trading at $116 with an IV Rank of 30.8. Expected move would be in range $99 to $133.
Iron Condor is made up with a Bear Call Spread and a Bull Put Spread. Normally it is with the same width on both the spreads and also same delta on the short strikes.
In our trade, we skew the Bear Call Spread to delta 30 for short strike and have a wider wing of $4, while the Bull Put Spread we will use 20 Delta for the short strike with a $3 width spread.
Bear Call Spread - Sell Call at Delta 29 $132 strike and buy call at $136 strike. $4 width for $0.85 credit.
Bull Put Spread - Sell Put at Delta 19 $100 strike and buy put at $97 for $0.60 credit.
Total credit collected $1.45. Max profit is $145 and max loss is $255 if NVDA goes ITM on the upper side of the Bear Call Spread and $155 if NVDA goes down ITM towards the lower side of the Bull Put Spread. The risk profile is below.
(do adjust the entry prices when market opens or when you enter the trade)
Trade Management
No real trade management is required. However, if NVDA goes towards any one direction, we can take profit on the other direction if the premium left is $0.05 and below.
Possibly to roll in time if the upper side of the strikes are breached, due to the wider spread, we could possibly get some premium for rolling in time. If lower side is breached, our risk profile is structured more or less risk 1:1. $145 gain to $155 loss on the lower end, so no real action is required.
OPTIONS TODAY - UPDATE ON NEUTRAL IRON CONDOR SPY
SPY is just sitting below our short strike of $570. We have already closed off the Bull Put Spread at $0.08 last week during the runup. As such, if SPY retraces we would go into overall trade profitability faster as there is no opposing force reducing the profit on the Bull Put Spread anymore.
OPTIONS TODAY - SMALL WINNER DIAGONAL ON MNST
As prices went up too fast, our short call $48.50 expired last Friday ITM and we were unable to roll without paying a debit. Further we see that the prices have been too extended and falling for the past 2 days, so the Long Call will also lose value if we continue to keep it. So we decided to exit with a small profit of 20%.
HELP US GROW
If you find our Newsletter insightful and helps you in your trading, please help us by sharing it to your friends. Your help in getting more people engaged will be great inspiration to us to continue sharing our thoughts on the market and options trading. There are hundred of readers getting insights weekly, if each of you add one subscriber for us one week, we will explode in time and can do much more for the readers when we achieve a larger audience. Thank you in advance for letting the word out!
TRADERS TALK
Review some of our most interesting trade shows in past Traders Talk. The training topics touched are useful insights and relevant if you want to understand the depth of options trading and strategies.
View Past Traders Talk here.
TIKTOK VIDEOS
If you like our videos, please give us a ❤️ or drop a comment on it!
Find your true happiness in life ❤️☺️ 🇨🇭#happiness #inspiration #life #love #success
Believe. It only takes 1 minute to change your life. #believe #motivation #inspiration #life #success
Understand this and you will gain a fulfilling life...😌 #motivation #success #inspiration #lifegoals
Life is a play. Your are your own director, screemwriter & actor in life's play. #motivation #success
We can no longer live the way our parents did, the world have changed. Don't conpromise your family and our future generations... evolve with the times..understand it and we will prosper.
We start a market education series to help aspiring traders understand how to become successful in trading.
Market Psychology…
What drives the market? Understand this to be a better trader 😉 #stockmarket #trading #bullrun
Struggles… Pain is inevitable, suffering is Optional.
So make each drop of your sweat worth it throughout your struggles in life... 😉
#struggles #motivation #inspirationalquotes
Happy New Year and May 2024 open new doors for you…
AI Validation on Options Strategy - GLD ETF using Strangle. We used ChatGPT Code Interpreter to backtest the strategy and WIN probabilities. #AI #optionstrading #chatgpt #codeinterpreter
Options Today - Bullish Trade on Apple. Increase Probability of Profits from below 40% to more than 80%. Trade as explained in our Options Trading Newsletter No.124. 31 July 23
Options Today - Trade on GLD As described in our Options Trading Newsletter Issue No.123, Jade Lizard on GLD. Entry 26.7.23. [This video is AI from my personal voice] 🤭 #optionsstrategy
Understanding IV - Part 1 - Understanding IV relation to options premium and how to read different measurement of IVs.
Understanding IV- Part 2 - How to use IV to trade GLD ETF.
DELTA is one of the most important Options Greek. Understand what it represents and how to use it to improve tour trading and how it is used for hedging and also capital and return management.
Iron Condor Trade on XOP. Get FREE petrol trading options. FREE Options Trading Newsletter https://mystylework.substack.com.
How to use Advanced Options Strategies to hedge your long term stock investment for free. Learn Options Trading for Free
Trading Options Using Jade Lizzard strategy. Get free petrol subsidies trading XOM 😏 #optionstrading #investing101 #stockmarket #xom
Banks don't want you to know this secret. Revealed in one of our earlier Traders Talk in June 2021. #banksecrets #investing101 🌈✨🏝️
Generate Property like cash flows from the stock market with only one fifth the capital. #Hello2023 #propertyinvesting #rentalincome #investing #stockmarket
Investing 101. It is difficult to catch the bottom and catch the best prices but we can tranch in our buy points so we can get the best overall long term returns without missing the boat. #hello2023 #investing #apple
Trade Digest on XBI - Trading Range using Iron Condor options strategy live from Traders Talk 27 Dec 22. #optionstrading #tastyworks
Long Trade on JD. Trade setup from Traders Talk 6 Dec 22 #optionstrading #tastyworks — www.tiktok.com TikTok video from Mystylework (@mystylework.trade): "Long Trade on JD. Trade setup from Traders Talk 6 Dec 22 #optionstrading #tastyworks". JD Long Trade | 6 Dec 22 Traders Talk | Like & Share ♥️. Lazy chill out, romance overseas celebrity, 10 minutes(1019319).
Trade Digest On XLE using Iron Condor #optionstrading #optionsstrategies — www.tiktok.com TikTok video from mystylework.trade (@mystylework.trade): "Trade Digest On XLE using Iron Condor #optionstrading #optionsstrategies". Iron Condor on XLE | Trading in Range Use A Neutral strategy | Iron Condor | .... Lazy chill out, romance overseas celebrity, 10 minutes(1019319).
5 ways to reduce cost of calls. The ultimate traders' guide. #optionstrading #optionsstrategies — www.tiktok.com TikTok video from mystylework.trade (@mystylework.trade): "5 ways to reduce cost of calls. The ultimate traders' guide. #optionstrading #optionsstrategies". 5 Ways To Reduce Cost Of Calls | options trading | traders | .... Lazy chill out, romance overseas celebrity, 10 minutes(1019319).
Trading options with 68.2% probability using Expected Move 😎 #optionstrading #trading101 — www.tiktok.com TikTok video from mystylework.trade (@mystylework.trade): "Trading options with 68.2% probability using Expected Move 😎 #optionstrading #trading101". Expected Move | How to trade options | trading options | .... Corporate Uplifting Inspirational Motivational Pop Rock Piano Violins Theme Song.
mystylework.trade (@mystylework.trade) on TikTok — www.tiktok.com TikTok video from mystylework.trade (@mystylework.trade). Butterfly Trade | How to setup low cost high returns options trade | Learn to trade options | .... Lazy chill out, romance overseas celebrity, 10 minutes(1019319).
Winning Options Strategies everyday. Creating high probability low risk trades 😎 #optionstrading #optionsstrategies #elonmusk @tastytrade — www.tiktok.com TikTok video from mystylework.trade (@mystylework.trade): "Winning Options Strategies everyday. Creating high probability low risk trades 😎 #optionstrading #optionsstrategies #elonmusk @tastytrade". Elon Musk | Stock trading | Another WIN 😎 | .... Sunrise.
Twitter shareholder's meeting for takeover by Elon Musk 13 Sep 22, 10am. Lets trade... #optionstrading #optionsstrategies @tastytrade — www.tiktok.com TikTok video from mystylework.trade (@mystylework.trade): "Twitter shareholder's meeting for takeover by Elon Musk 13 Sep 22, 10am. Lets trade... #optionstrading #optionsstrategies @tastytrade". select Nov 18 expiry | Sell ATM call strike 43 | recheck ATM price on open on Monday | .... TikTok's song-like tropical house(974524).
J.Powell's Message yesterday in 1 minute... @tastytrade #optionstrading #optionstrading #stockmarket — www.tiktok.com TikTok video from mystylework.trade (@mystylework.trade): "J.Powell's Message yesterday in 1 minute... @tastytrade #optionstrading #optionstrading #stockmarket". Fed Message??? 🏦 | Responsibility For Price Stability.... | Inflation Target | .... Suns.
What to expect for this week's market.. #optionstrading #optionsstrategies — www.tiktok.com TikTok video from mystylework.trade (@mystylework.trade): "What to expect for this week's market.. #optionstrading #optionsstrategies". SPX down 141 points (3.37%) last Friday after J.Powell speech | Monday another 27 points drop | but we see some slight support at 4000 level above daily 50 MA | .... Change My Mind.
Option Trade on JD - watchlist at last Traders Talk on 9 Aug. Closed today $922 profit 🤑 #optiontrading #tradingstrategy — www.tiktok.com TikTok video from mystylework.trade (@mystylework.trade): "Option Trade on JD - watchlist at last Traders Talk on 9 Aug. Closed today $922 profit 🤑 #optiontrading #tradingstrategy". Option Trade JD covered potential trade during 9 Aug Traders Talk Entry 9 Aug Exit 26 Aug Profit $922 | watch till end to see the trade we did 😉 | Option Trades Adjustments - Based on Price Actions | .... YOU'RE MY SUNSHINE.
Hawkish remarks by J Powell crushed the market - pullback expected until Next FOMC in Sept 21. Watch for key points raised #optionstrading #optionsstrategies — www.tiktok.com TikTok video from mystylework.trade (@mystylework.trade): "Hawkish remarks by J Powell crushed the market - pullback expected until Next FOMC in Sept 21. Watch for key points raised #optionstrading #optionsstrategies". Key Points For Traders | Here's what JP said.. | > rates will go up until inflation is down to 2% | .... Flip through.
FACEBOOK
Visit and follow us at our Facebook Page for more contents!
Access here >>Facebook Page<<
DISCLOSURES
Options involve risk and are not suitable for all investors. Please read Characteristics and Risks of Standardized Options before deciding to invest in options: https://www.theocc.com/components/docs/riskstoc.pdf
MYstyework is an Online Financial Literacy Educator and materials provided is solely by MYstylework and is 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, futures contract, transaction or investment strategy is suitable for any person. Trading securities can involve high risk and the loss of any funds invested. MYstylework, through its contents, does not provide investment or financial advice or make investment recommendations. Investment information provided may not be appropriate for all investors, and is provided without respect to individual investor financial sophistication, financial situation, investing time horizon or risk tolerance. MYstylework is not in the business of transacting securities trades or an investment adviser.