Trade recap for Monday 10/23/23

Trade: $NFLX 410c

• Reasoning: relative strength / 405 break

• Entry on the contract: 5.55

• Exit on the contract: 4.1

• Profit in percent: 26%

Today, NFLX was gapping up while we had the overall market gapping down. NFLX was on watch due to the strength we have been seeing post earnings and with it being in an hourly consolidation. When NFLX opened we saw a quick pop without an opening low and this was one of the criterias for me to take a trade. It then pulled back into 402, made a new LOD then pushed back through 405 triggering a trade. I was also looking for a bounce in the market and if we saw a bounce in the market, focusing on the relative strength names work well. In this case, we saw a reversal all the way back into 400 and I stopped out under 403. So this went from relative strength (with market support) to failing and stopping me out.

Trade: $SPY 422c

• Reasoning: held 420

• Entry on the contract: 1.01

• Exit on the contract: 1.41

• Profit in percent: 40%

Today, SPY started with a gap down, broke down the recent lows from September but was able to get the reclaim of 420. Following the reclaim of 420 it ended up holding a higher low above this level which was the entry for calls. When you see a major support get broken but is quickly reclaimed this is a sign of a bounce in the markets. Sometimes these supports are intraday that develop or on the daily like we saw today.