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Today we have guest ttJon on the webinar. We look at ULTA on the daily for a directional options trade. He has a theory on what it will do into earnings. He waits for a pullback and uses a limit order to enter. We see just about immediately that the stock goes in his favor. However, he doesn’t have a stop plan at this point. The trade plan completely goes to his target and the option is in the money and double the value that he paid for it. We see that the stock pulls back and now he’s aggravated that he has missed out on the 100% game. He then changes his game plan mid trade. Instead of selling before earnings, he buys a put to protect his downside. To those unfamiliar, there is the blowfish effect on options held through earnings (covered in the Advanced Options course relating to implied volatility). This led to overall losses on both his call and put.