Trade of the Week by TradePartner

 Dear Friend, Welcome to this week's Trade of the Week by TradePartner where we show you one trade you should be looking into for the week. We do this every week for you, so keep an eye out for another one next week. Let’s dive into last week’s action. Nasdaq QQQ The Nasdaq moved down a bit this passed week. We had put on this trade as a bullish play a couple weeks ago: Buy 1 QQQ Dec17, 382 Call @2.51 Sell 1 QQQ Nov19, 390 Call @10.87 Since we put on that bullish play, the Nasdaq moved further down. This is good for the initial bearish play but obviously pulled the bullish play negative. Remember this didn’t really matter as the market could have gone to zero and it would have net us about $90 total on the trade. But we decided to make the trade more interesting and we closed out that bullish play and opened the following play: Buy 2 QQQ Nov19, 372 Call @4.59 Sell 1 QQQ Nov19, 355 Call @13.59 We’re in at 4.41 credit and here’s the risk graph below: The trade above has unlimited upside and can’t lose on a market selloff below 359.37. It will lose if the market rallies a little and does nothing around the long call of 372. Max risk would be around $1200 but that would be at expiration. So, if one held this position through and the market did nothing at 372 you would be at max risk. Now, here’s the risk graph for the original bearish play we put on a few weeks ago. As you can see, the risk to the bearish play is to the upside and is defined. Max reward is at the short strike 367. This would offset some of any negative theta from the long play referenced above. To sum up, we have unlimited upside, guaranteed profit if the market tanks below 359 and we’ll look to pull profit if the market rallies. Also note, the negative cost basis for closing the previous bullish spread which was -$228. Remember you have to keep track of your cost basis whenever you add/remove positions. 30 year Treasury Bond /ZB Rolling our /ZB calls down after putting on the /ZN puts was the right move. We closed out of everything on Monday since premium came in nicely. Total net on the trade was a little over $300. Don’t be afraid to sell naked folks. Selling premium is heavily misunderstood so hopefully over time with this newsletter you’ll learn how to do it a bit more efficiently. Couple of you played it so hats off for having no fear.   BABA BABA still looking weak so we are moving both strikes down and giving the trade more time. Here’s the roll: Buy 1 BABA Feb18, 145 Calls @17.06 Sell 1 BABA Jan21, 155 Calls @10.82 She’s currently at the $140 price point last tested in Dec 2018. This is an important level so here is where we are planting the foundation for this roll. Total cost basis for both rolls so far totals -$251. So, we are targeting that amount plus some return for our time in the trade, if possible. NTES First thing I need to address is the typo from last week’s trade on NTES. The following was sent: Buy 5 NTES Dec17 95 call @ 4.30 Sell 5 NTES Jan21 95 call @ 3.30 The trade is a calendar but this is a short calendar which obviously is not the intention. The expirations need to be swapped. We apologize for the confusion. Some of you know, writing weekly content can be very time consuming and sometimes fatigue can get the better of you. Anyhow, the trade still looks good. No adjustments needed and we continue to hold. The Week’s Play: We are going to play the VIX. We are bearish on the VIX going into the holiday season and with the recent pop in volatility, we are setting up the following play. Sell 2 VXMF22 Future @ 24.90 So, we are going short volatility out in January with 2 contracts on the Mini VX contract. I wanted to show you the graph below and a neat way some traders gauge bullish clues. So, in this graph of the SPX, you see that the index had a test of a low on 9/20 then it broke that low on 10/1 Volatility on the other hand didn’t follow suit with new highs This is a decent bullish clue so we decided to short volatility here. No option plays (yet), just the straight futures contract. We are setting a hard stop at 10pts which would be 1k on the mini volatility futures. We’re targeting 4-8 handles depending on what the market decides to do in the coming weeks. And finally, we may be on the cusp of setting up a full program for the many of you interested, so if you have any additional feedback or suggestions, please let me know! Thanks again for tuning in and I’ll see you next week. Trade focused, Benjamin – Market Monster Hunter Sent to: {EMAIL} [Unsubscribe]( Spyrol Group, LLC, PO Box 1510, Clearwater, Florida 33757, United States