SPY FEB03 405/FEB01 410 DIAGONAL CALL
Updated
HIGH BASE/ ASCENDING TRIANGLE
SPY has been trading above a rishing 50 day and 20 day and has been forming an ascending triangle or high base. It recently made a swing high on January 23rd which I used as my trigger. For the most part, SPY has been consolidating since let's say about the 12th of this month? Consolidating between 390 and 400 equal volume. Since we traded above the high of the 23rd I decided to get into this shorter term trade.
No stops will be used as I'm set up for max loss risking less than 2% of my portfolio.
I placed an anchored vwap on the daily chart from the high of January 2022. So if we look ay an hour chart, I'm thinking this is going to want to climb back up into the upper trend line I drew to make it's way to 410 or even break through 410.
I selected Feb 1st as my expiration date as I would anticipate a run up into the middle of next week into the 410 area or maybe even much higher before it retraces back to the lower levels. I'd be looking to get short in this 410 area or maybe 420 area is it wants to go higher into the end of next week. Maybe up to 430 by middle of February.
If this goes lower, I'm set up for max loss so I'll let it expire worthless.
If this goes sideways, which could happen because we've been in this sideways trend for a few weeks, I'll let my 410 expire and hang on to my 405 strike until next Friday.
If this is well above by the 1st of February, I'll close out the entire combo. But if it is not at or above 410 by the 1st, I'll hang on to my 405 strike until it reaches my 410 target. Once it gets to 410 i'll close out the 405 strike even if it gets to my target before the 3rd.
SPY has been trading above a rishing 50 day and 20 day and has been forming an ascending triangle or high base. It recently made a swing high on January 23rd which I used as my trigger. For the most part, SPY has been consolidating since let's say about the 12th of this month? Consolidating between 390 and 400 equal volume. Since we traded above the high of the 23rd I decided to get into this shorter term trade.
No stops will be used as I'm set up for max loss risking less than 2% of my portfolio.
I placed an anchored vwap on the daily chart from the high of January 2022. So if we look ay an hour chart, I'm thinking this is going to want to climb back up into the upper trend line I drew to make it's way to 410 or even break through 410.
I selected Feb 1st as my expiration date as I would anticipate a run up into the middle of next week into the 410 area or maybe even much higher before it retraces back to the lower levels. I'd be looking to get short in this 410 area or maybe 420 area is it wants to go higher into the end of next week. Maybe up to 430 by middle of February.
If this goes lower, I'm set up for max loss so I'll let it expire worthless.
If this goes sideways, which could happen because we've been in this sideways trend for a few weeks, I'll let my 410 expire and hang on to my 405 strike until next Friday.
If this is well above by the 1st of February, I'll close out the entire combo. But if it is not at or above 410 by the 1st, I'll hang on to my 405 strike until it reaches my 410 target. Once it gets to 410 i'll close out the 405 strike even if it gets to my target before the 3rd.
Trade active
Note
If we get to 410 today,I'll close the entire combo out. If not, I'll hold on to my 405 strike until we reach the target.Trade closed: target reached
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