Trade Recap for Thursday 8-9-23

Trade 1: $BABA 100c

• Reasoning: key level reclaim

• Entry: 1.95

• Exits: 2.27, 1.93

• Size: small

• Profit in percent: +16%

Explanation:

Today, BABA was gapping up following earnings and made a move into the key 100 level. When BABA crossed 100 I went long looking for a breakout. BABA was able to run almost two points over 100 but the premiums on the 100c weren’t moving as they should have been. Because of this, I wanted to book profits as we approached 102 (which would normally be a 25-30% move). I was only able to get 16% for a ½ sell and got stopped out break even on the rest. Solid setup but again, premiums couldn’t follow.

Trade 2: $DIS 90c

• Reasoning: key level reclaim/relative strength

• Entry: .90

• Exits: 1.08, 1.30, .76

• Size: small

Explanation:

DIS was gapping up post earnings but needed to get through the key 90 resistance level for calls. When DIS first opened, we saw a quick push through 90 but I will never take a call entry post earnings without a pullback/digestion phase first. In this case, DIS opened up and immediately ripped to the upside. We didn’t chase this move (good thing to because we saw a 2 point reversal from 90). After it pulled back/consolidated it started to show relative strength as it approached 90. When 90 broke, I went long with the 90c looking for a move into HOD which was 90.70. We got the push into 90.70 and were able to book 44% before getting stopped out on the last 1/3 of the position.