4/4 Recap

Slow session the day before the jobs report, nobody was putting on much size after this massive gap up with some big data looming. The SPY is back in a position of strength reclaiming the 8 ema. Every little dip we have going on 6 months is just merely an opportunity to go long, there has been almost zero risk to doing so. Once again we teased with a 21 ema break this week and just resolved higher.

The dollar has pulled right back to the trend line from the recent breakout which is why we had this strong move back up.

I’m going to go right to a topic I wanted to your take on. I wanted to go over the risk reversals I highlight daily. Someone shot me this DM in the discord and we had a talk

So basically his issue was he’s got a $3M book and he sold 10 puts to buy 10 calls on XOM and it is up about 700% this week, I wrote those XOM calls up saturday, so that is a hell of a week to me, anyhow, the total profit on 10 puts sold and 10 calls bought was negligible to his total return and he asked me if he was doing something wrong.

The answer is, no. When I suggest risk reversals, it is because I’m trying to structure a trade to where it costs you as little as possible or even pays you to place it. The reality is I’m here to just post ideas for you, but how you play these, that’s your call. Yesterday if you recall in the recap that risk reversal that player put on FOUR and I said that had a $5 debit, and if I was to play this trade I’d do it this way, for free.

My focus is on trying to provide direction on the move, how you execute the trade that’s your call. If you want to skip selling puts and buy calls, you can. If you want to buy shares, you can. If you want to sell 1 put and buy 4 calls, you can. You can do it however you want, but the reason I try to put the trade on for free is because, sometimes I am wrong too and by making sure the trade is put on for free, my risk of loss is much lower because it really has to blow through where I sold puts, usually at support, to burn me.

I have a unique style, I’m not like everyone else on fintwit that’s just telling you buy calls everyday. I’m telling you to think about how to get your calls paid for with short puts at support so that when you’re wrong you’re not crying about how much money was lost. By all means if you love a trade I post, sell some puts to offset part of the cost and put it on for a debit and swing for the fences, buy as many calls as you want, nobody ever got rich without taking risk. Worst case, the stock comes lower, you take shares and then sell covered calls higher till you work out of it. Just remember, you can work your way backwards out of any situation in the market as long as you are smart about things and not overleveraged.

Comment below, I want your feedback, how do I relay what I’m trying to say better? Should I just stop posting my ideas because its confusing? I can, I never did until a few months ago. It’s hard to put a one size fits all idea because there’s really no names I ever have to have. For me these are all trades and I always start by selling puts lower and going from there. I am posting simply how I am taking the unusual trade I’m seeing that day and putting my twist on it.

Recent Trades

I highlighted DELL in the 3/25 recap here. This has been a monster, in 10 days since that post DELL is up 17% to 132.40. Those 114 calls bought that day expiring this week 2000x are still in the OI and are up hundreds of percent right now. What a bonkers move. That PEG setup I highlighted below is one to always watch when a name gaps up and doesn’t fill the gap and turns around higher. Amazon made the same move this Q. Strong names do not fill the gap.

Trends

1 Week

2 Week

1 Month

Today’s Unusual Options Activity

Here is today’s link to the database, I will have the rest of the days action by the afternoon. So check back later for updates. I get lots of comments about changing the size of the chart below, I really can’t do anything that’s why I tell you to check all this stuff in the app below. For starters, it is alot better, you can click on every ticker and see every trade. Secondly, it is alot better view in there.