$COST ~ COSTCO~ SHORT SETUP USING PUT SPREAD~ #OptionsTrading

Dec 16, 2019

METHOD: Short COSTCO {price at entry ~ 292} via:

• +2 VERTICAL COST 100 (Weeklys) 27 DEC 19 300/292.5 PUT @5.00 ;
  
• Trading @ low IV after the earnings dump;
  
• Decay helps if price < 294;
  
• Sold high extrinsic put to buy high intrinsic put
  

STRATEGIES: Using COST day chart:

• The 20/50 Mean looks set to make a big pink cloud after a long chart runup.
  
• The Fisher Transform line signaling a continuation short.
  
• The last earnings bailing of stock price turned out to last a few days.
  

TACTICS: The plan in terms of stock price:

• STOP is price > 295 (MUST OBEY, Upside down R:R trade)
  
• TGT1 288 to scale; TGT2 286.25 to exit (NO EARLY EXIT, Upside down R:R trade)
  
• Consider scaling as pink cloud becomes large
  
• We may let the Fisher Transform and 20/50 mean together take us out technically for whatever we get win or lose.
  

Will update in comments,
B3
d^.^b

Dec 16, 2019

Trade active

Was able to get a better price than expected, 4.60 instead of 5.00. Stop raised to 296 due to slightly better R:R now, which STILL means this trade works immediately or is exited.

Dec 30, 2019

Order cancelled

Sideways action brings need to put the money to work elsewhere.

Dec 30, 2019

Trade closed manually