JWN Bearish inclined naked calls 14 Oct expiry

16 de set. de 2022

Whats The Plan/Trade/Thought

• JWN seems like a good candidate to sell calls especially since they had a huge 16% gap down after their earnings on the 16 Aug
  
• My hypothesis is that there will be a continued bearish price movement below S&R 19.26. Encouraged by the broader market movement and retail’s tightening
  
• Despite the Fed’s action, the latest reports still see a rising CPI and Core inflation numbers. If the effects are not yet felt by the consumers this will catch up soon
  
• JWN has a S&R line on 19.26 and so far it seems to be holding out
  
  Risk Mitigation
• 21.72 is a Trade Risk Point where the recent gap would be filled and a full reversal is confirmed
  
• 19.26 is an S&R line and if it holds out it confirms the new bearish price direction
  
  Imagine Yourself Taking The Other Side
• With the huge 17% bearish gap, I don’t think it is a good risk to be bullish on this stock. Especially with the bear market stance
  
  Look For New Information
• No new information
  
  How Do I Feel Now
• I would have preferred to sell at the strike of 23 but the price provided was not conducive. I bought this at 22.5 as if my hypothesis of a continued bearish price direction at S&R 19.26 holds, we should be ok.
  
  Trade Specs
• Sold 410 Calls @ 0.15
  
• Strike: 22.5
  
• % to Strike: 22.73%
  
• BP Used: 77k
  
• Max Gain: 6150
  

31 de out. de 2022

Trade fechado: objetivo atingido