Hi Antagonist members,
Below are the full details of the trade that I discussed in our premium member chat today.
As a reminder, whenever I’m considering a trade, I announce it via the chat function in the Substack app. Be sure to turn on notifications so that you don’t miss an alert.
I use the chat feature for 3 reasons:
Many people only check their emails a couple times per day. The app (with notifications turned on) ensures you see my trade alerts in real time. You’ll know when and why I’m considering a trade before I even place it. This lets you conduct your own research to see if a similar trade is right for you.
You likely receive dozens of emails per day. The chat reduces the number of messages you receive from me without sacrificing content.
The chat gives you the opportunity to post questions or comments.
Mimic this trade with paper money
As a reminder, you can mimic all my trades (and any other trade) without risking any money by paper trading. If you’re new to options or just want to practice without taking any risk, I highly recommend this approach.
I explain how to do this in this video:
Opening trade details:
Bull Call Spread Option—Alphabet Inc (GOOGL)
The dollar amounts represent 1 contract. If you buy more or less than that, your max profit and loss will change accordingly.
Bought (to open) a bull call spread option with an expiration date of Feb. 16.
Stock price at the time of my trade: $143.52.
Bought the $143 call and sold the $144 call.
Trade cost and max loss: $50.
Max profit: $50 before commissions and fees.
Profit target: 80% in 11 days.
I also placed a good-til-canceled (GTC) order for $0.90.
For the my trade rationale, refer to this post in our premium member chat.
Before you follow any of my trades, read this!
If you’re new to options or need a refresher, check out these free guides. And feel free to ask questions by replying to this email, leaving a comment, or posting in our chat.
If you’re going to follow my trade, you will probably see different prices than I paid. That’s because stock/ETF prices constantly move.
If you can get the same strike price for the same premium (or lower) that I paid, that’s great. Often times, however, you can lock in an even better strike and/or premium. That will occur if the underlying stock/ETF price is different from when I entered the trade.
If that happens, it’s always best to get a lower strike price for a call or a higher strike for a put. I typically buy the leg that is ITM and sell the leg that is OTM. You can use that to guide you as you select your strike price. This will usually result in your getting a better strike price than I got but for a similar premium.
I do NOT recommend buying OTM calls or puts even though the premium is cheaper. You want to put the odds more in your favor, not less. Also, try not to pay more than $0.60 to open your $1 spread option ($0.30 for a $0.50 spread).
Lastly, if the underlying stock/ETF increases (for a call; decreases for a put), you likely won’t be able to get the same strike that I got for the same premium. It’ll be much more expensive.
If that’s the case, just wait. The stock/ETF may change in the next day or 2, and you can open the option then. If the price doesn’t move in the direction you want, just let it go and skip this trade. Don’t worry. There are always plenty of trades available. NEVER chase a trade out of FOMO (fear of missing out).
And as always, do your own research before making any investment and trading decisions. Everyone’s situation is different, and I am not a financial advisor. I simply share research with you to help you make your own decisions (see full disclaimer below).
Happy trading,
Jason Milton
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Disclaimer: The “Antagonist Stocks and Options Research” newsletter (hereafter: The Antagonist) is an online financial literacy resource. All materials from The Antagonist are intended for informational and educational purposes only. They are not, nor are they intended to be, trading or investment advice or a recommendation that any security, futures contract, transaction or investment strategy is suitable for any person.
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