SheridanTV Live Trades from Thursday Aug 2

#1  GLD: Sept 21 Expiration, Bullish Butterfly.  B 1  114 C, S 2  117 C, B 1  120 C  .82 Debit. Spread trading around .88-.89 area today with GLD trading higher at 115.06  +.54.

 

#2  NFLX:  Aug 10 Expiration, Bullish Butterfly.  B 1  342.5 C, S 2  352.5 C, B 1  362.5 C,  2.35 Debit. Spread Trading about .30 lower today with NFLX at 340.70 -3.78.

 

#3  SPX:   Short Term Butterfly. Aug 10 Expiration. B 1  2800 C, S 2  2830 C, B 1  2860 C,  11.80 Debit. Spread trading around the same price as what I paid with SPX today at 2836  +9.

Watch yesterdays episode below.

 

SOM TV Trades from Tuesday Jul 31

AAPL  Iron Condor for Earnings in the Aug 3  Expiration

S 1  Aug 3  200 C, B 1  Aug 3  205 C,  S 1  Aug 3  180 P,  B 1  Aug 3  175 P,  1.06 Credit

With AAPL + 8.61 at 198.90  , the Iron Condor is trading at .99, we are up a small bit. We are about 7 points from the short call strike of 200 with today, Thursday , and Friday till this trade expires. The position Greeks for 1 contract are -32 Deltas short and 15 Theta  and -4 Vega. The high today is 199.26. If we break 200, the short strike, I would adjust the trade by buying the 190/195 Call spread to narrow the width of the call side 5 points and reduce the short deltas. Bottom Line:  Earnings are out , we are up a small amount of money and have a plan if the short strike is threatened.

AAPL  Bearish Butterfly for Earnings in the Aug 10 Expiration

B 1  195 P, S 2  185 P,  B 1  175 P,  2.60 Debit. With AAPL up 8.61  at 198.60, we were wrong on this speculative Butterfly and sold it out today for 1.29 Credit. Wanted to cut the losses , we were wrong. For this butterfly to make money, we need it to go towards the short strike by next week and the Aug 10 Expiration. That would be 185 in AAPL by next week or near that price, and frankly, doesn’t look like that probably will happen. If I stayed in the Butterfly hoping for a decline in the next week, I could watch the 2.60 debit go to zero. I basically pared the loss in half.

SPOT  Iron Condor

Iron Condor in Spotify Aug 10 Expiration.  S 1  190 C, B 1  195 C,  S 1  180 P, B 1  175 P,  2.55 Credit. Currently trading at 2.45 with SPOT at 182.34, not much going on.

 

BIDU Earnings Trade

BIDU has their earnings call tonight and one interesting trade idea if you are bullish  is to put on an out of the money call fly to take advantage of a strong bullish move. Below is an example taking into consideration the market maker expected move of $16:

August 3rd expiration

Buy one 260 strike call

Sell two 270 strike calls

Buy one 280 strike call

Right now the debit for the trade is around $1.50 per spread.

Plan to exit tomorrow or later this week before Friday expiration. If this trade  doesn’t work you will like lose the entire cost of the trade, but if it does work you could make 20% to 50% or more.

Mark Fenton

mark@sheridanmentoring.com

Update for AMZN and FB trades from SOM TV from Yesterday

AMZN  Double Butterfly in Jul 27 Expiration. Our short strikes in the Butterflies were 1910 in the Calls and 1710 in the Puts. AMZN opened at 1876, hit a high of 1880 , and then dropped off to 1849 area. At the opening, I sold out the Call Butterfly for .36. The total cost of the Butterfly was .75. Net we lost $36 for every 1 Double Butterfly. Not bad for a cheap shot. The move in AMZN was less than the expected range of $100 , which is where we structured the short strikes of the Butterfly. Lesson Learned: Next Earnings , I will probably do this strategy , but I will pick an expiration 1-2 weeks past the earnings date to structure the Fly. Reason?  It’s very rewarding but difficult to structure a Double Butterfly in the expiration that is the same week as the Earnings Release date. Doing a Double Butterfly in an expiration that is the same week as the Earnings release date requires almost precise accuracy when picking the short strikes, very difficult. It’s like making a Bullseye. Giving us an extra 1-2 weeks next time should provide just the right tweak to this very low cost and potentially high reward strategy!

FB: Bullish Butterfly in Aug 3 Expiration: B 1  175 C, S 2  180 C, B 1  185 C,  .87 Debit.  Today, with FB at 177.70  + 1.42. Just Sold out the Butterfly for 1.25 Credit, 43% yield in 1 day, excluding commissions!

 

Dan Sheridan

dan@sheridanmentoring.com

Live trades from today’s SheridanTV

#1  AMZN Earnings Double Butterfly in Jul 27 Expiration

B  1  1900 C, S 2  1910 C, B 1  1920 C  .35 Debit  B 1  1720 P, S 2  1710 P, B 1  1700 P  .32 Debit

#2  FB  Bullish Butterfly  Aug 3 Expiration

B 1  175 C, S 2  180 C, B 1  185 C  .87 Debit

#3  SPX Butterfly Aug 10 Expiration (Didn’t get filled)

B 1  2810 C, S 2  2840 C,  B 1  2865 C,  9.70 Debit.

#4  Adjustment for Tuesday’s Live Calendar in SPX

B 1  Aug 20  2940 C  1.20 (Decided to just buy a cheap call versus re-positioning the Calendar like I talked about) See video below!

Live Trades from yesterday’s SheridanTV

3 Trades from Yesterday’s Show that I put on Live

# 1   TSLA  Short Term Bullish Butterfly

B 1  Jul 27  300 C, S 2  Jul 27  305 C, B 1 Jul 27  310 C,  .65 Debit. Looking for TSLA to be near the short strike of 305 by Thursday. Today TSLA is at 299.62  +2.19, moving in the right direction. The price has already moved up near .75, have order in now to sell for .95 credit.

#2  NFLX  Short Term Bullish Butterfly

B 1  Jul 27  360 C, S 2  Jul 27  365 C, B 1  Jul 27  370 C,  .72 Debit. Spread trading around .70 with NFLX down a little over $1, at 356. We need NFLX to have an up day tomorrow and  move toward 360 area.

#3  SPX  Calendar

With SPX around 2815 yesterday, we did a short term Calendar. We bought 1  Aug 20  2815 C and sold 1  Aug 3  Expiration 2815 C for Debit of 9.65. The Spread is trading a little lower today, around 9.45, with SPX around 2819. Nothing much going on with this today.

 

SheridanTV #7 Trades for Thursday July 19, 2018

AMZN High Octane 1 Day Iron Butterfly with AMZN near $ 1815.

B 1 Jul 20 1815 C, S 1 Jul 20 1805 C, S 1 Jul 20 1805 P, B1 Jul 20 1805 P, 8.15 Credit. Risk $185. Looking to take this trade off for a profit in the first 1-2 hours of trading tomorrow as long as AMZN is somewhere between 1785 and 1840. Will keep you posted with what I do in the AM tomorrow.

TSLA 1 Week Iron Condor with stock near $320

Jul 27 Expiration. 335-340 call spread and 305-310 Put spread. 2.29 Credit and I didn’t get filled . If I try this again tomorrow, will let you know.

SPX 15 Day Butterfly

Aug 3 Expiration. B 1 2780 C, S 2 2810 C, B 1 2835 C, 9.70 Debit. Not filled yet, if I get on tomorrow will let you know.

*** TRADE UPDATE AS OF 9:50am 7/20/2018***

Yesterday we did an 1 Day Iron Butterfly with the short strike of 1815 for an 8.10 Credit. Today, with AMZN  at 1831  +18, the spread is trading at 8.40-8.70 area and I took it off for 8.40, a small loss.

NFLX Earnings Strategy: Directional Butterfly. Stock is around $393

Earnings in NFLX are after the close today. NFLX stock is down 7% from its highs of $423 on Jun 21, about 3 ½ weeks ago. The Projected price move for earnings on the TD Ameritrade Platform is around $30, projecting about a 7% potential move in the stock. The July 20 At the Money Straddle for this week is around $34, projecting a potential move of about 8.6% up or down. Bottom line , the projected moves are between roughly 7 and 8 ½ %. What range does that project for where NFLX could possibly be tomorrow in the AM when the stock opens? The answer using the current price of $393 is: $359 to $426. There is a high Probability tomorrow morning, NFLX will be somewhere between $359 and $426, up or down about 8 ½%. Now to today, what would I do? Do I know what will happen tomorrow? Of course I don’t know what will happen tomorrow, either do you. But the question to answer is this: Do I think NFLX will be between 359 and 426 or do I think it will be outside this range. Either answer is still going to make the strategy I pick a speculative play and I will be careful not to trade too large. If one thinks the range will be between 359 and 426, I would choose some type of range bound strategy like Iron Condors or Butterfly. If I think the range will be outside 359 and 426, I will pick a more speculative strategy like a Long Straddle or Strangle. A 3rd choice is to take a directional opinion up or down and use a strategy like a long vertical or directional Butterfly to express that directional opinion. I will choose a directional bullish Butterfly on the upside that would benefit from IV decreasing on the upside, a price increase that could help me, if move doesn’t go too far through my short strike, and if I’m wrong , it’s a cheap shot. Why am I going to take a bullish outlook? This is pure speculative and I am going for a home-run with a small amount of capital I have.

Dan Sheridan

Dan@SheridanMentoring.com

TSLA Bullish Trade

TSLA is  trading at 312  +3 for today. I’m looking for a cheap shot on the upside. 3 weeks ago, TSLA traded $373. Today it has bounced a little but is still trading 16% lower than it did 3 weeks ago. If I am looking for more of a bounce over the next 2 weeks, here is a trade in the July 20 Expiration , I did today.

Trade:  Buy 1  320 Call, Sell 2  330 Call, Buy 1  340 Call,  1.12  Debit. July 20 Expiration. Looking for TSLA to be between 317 and 345 over the next 7-8 days. This is an 11 Day trade. My profit Target is around 40% and look to get out of this trade in 7-9 Days. I paid 1.12 Debit and would like to sell it out for around 1.55 Credit. If TSLA trades under $300 in the next 7 Days, I probably would get out.

 

Dan Sheridan

dan@sheridanmentoring.com

 

What is a Cheap Way to get Long TSLA?

Monday,  Jul 2 of this week, TSLA traded  intraday at  364, it closed at $335. Today, Friday July 6, TSLA is trading at $308, down 15% or 56 points from Monday’s Highs! You can check the proposed reasons for this on the web or a multitude of places, so I won’t focus on the  Pundits opinions. What I will focus on is this: If I think TSLA will recover some of the 56 points it lost this week , maybe over the next 2-3 weeks, how can I get long? Better yet, how can I get long without getting my face ripped off if I’m wrong and TSLA goes down more? I have many choices to get long TSLA , but will focus on 3 popular ones. I can buy a long call or a long Vertical, 2 popular choices. Both have decent risk if I’m wrong. My third choice involves starting with a long vertical and then selling a short vertical against it where the short strike of both spreads is the same. What is this called? A  Butterfly Trade. This is much cheaper dollar wise than a long call or vertical. Can this Butterfly trade make as much money on the upside as a long call or long vertical? Usually not, but in some cases yes. I also would place this trade a bit out-of-the money on the call side if taking a Bullish stance. So going with an assumption we think TSLA can increase some over the next 2-3 weeks and recover some of the 56 points it has lost since Monday’s highs, here is the trade idea. TSLA is currently at  the 309 area.  I will use the Jul 27 Expiration, 21 Days out from now. I will Buy 1  Jul 27  325 Call, Sell  2 Jul 27  335 Calls, and Buy 1  Jul 27  345 Call for .80 Debit. My max Risk is the debit or $80. I would like the stock ideally to go near my short strike as we get closer to the Jul 27 Expiration, sort of the sweet spot. I placed my short strike at around a 30 Delta, why? A 30 Delta indicates that TSLA has about an 60% probability of touching my short strike between now and expiration. My Plan would be to hold the trade about half of the duration I am Trading . This is an 21 Day trade, so I would probably look to stay in this trade at the most, about 10-11 Days. My plan would be to make 50% of my total capital; expenditure. If I pay .80, would look to sell out at 1.20 credit. That’s my Cheap Bullish shot idea on an expensive stock like TSLA. Remember, this is a Speculative play on a Volatile stock and only would consider this trade if I had a bullish bias on TSLA over the next 3 weeks.

Dan Sheridan

dan@sheridanmentoring.com