Seeing a distinct V shaped pattern in the S&P with many gaps. Also, looks as if we started a new wave count. However, could break down if corrective wave does not mature into an impulse Big 3.
Here I give a few conditions or options so to speak, to trigger a Call play or Put play with a longer trending Call play. Out-of-the-money Options .01 to .04 per contract, 900 to 280 contract options (100 shares per contract); .05 to .12, 250 to 100 contract options .12 to .25 100 to 50 contract options.
Some rules: Do not hold contracts when nearing in-the-money. Rollover Calls and or Puts if pattern breaks or breaks down. If buying or selling options after mid-day trade on expiration day, execute trades within .50 of price target and bump up/down .50 if S&P is on a run or breaks given the adequate time (more than 40 mins. unless rare case extreme high implied volatility- i.e. 08-09 crash/flash crash/US downgrade).
If this truly is a Wave 2 correction, we would see ; zig zag, triangle or flat, retrace from the resistance-gap window. If we are lucky enough to have a double zig-zag we will have multiple chances to use both calls/puts between resistance and support until expiration.
If you want to HEDGE (collect money while you wait for nothing to happen, which may be the case) YOUR BET, you can sell Dec. 7th 143 Puts 50/50 or sell 138.50 Calls 50/50. If nothing happens sit back and collect the premium.
If all else stop trading to rest and rethink strategy.
Booya!
Merry Christmas Rally
I would also like to give credit to B M tradingview.com/u/BM/ for pointing out the impulse EW count.
Comments
QuantitativeExhaustion
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botta bing.. botta boom
QuantitativeExhaustion
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Still holding onto position; Selling Dec. 07 Calls 138.50 and Selling Puts Dec. 07 143 Puts OTM