For next week's trade, we have purchased a Jan 3rd $31.00 XLF call option and a Dec 20th $18.00 VXX call option. The cost of the trade was $0.40. The expectation is for the trade to reach $1.00. Stop loss pricing is in effect. Some reasons for the trade are below.
- Market is at all time highs
- Different kind of spread trade
- XLF broke out with a big positive candle this week
- VXX is at bottom of its range
- Trade deal confusion persists
- Santa rally?
*An earlier version incorrectly had Dec 27th as the date of the XLF option.*
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Another reason to buy $VXX calls ...$VIX monthly options expire Tuesday / Wednesday 18th which always leads to a spike on or after https://www.macroption.com/vix-expiration-calendar/
ReplyDeleteThanks for the comment! Unfortunately, our stop loss was hit on the vxx calls. It would now need a 30 percent bump for a likely profit. On to the next trade! Good luck
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