I Missed NVIDIA by Pennies

Hey trader, I missed a bearish NVIDIA trade by pennies this morning. I wanted an NVIDIA put vertical for 40 cents. A put vertical is basically a put you buy, paired with a lower put you sell to cut the cost. Watching a trade run off without you stings. Your first instinct is to bump your bid a few cents at a time. If you chase it far enough, you’ll pay more than the trade can give back. I got filled when I raised my limit to 60 cents. I wouldn’t have paid a penny more. My profit target set that ceiling. I’ll show you how to work backward from your target to the most you should pay. You’ll also see why you can move faster on your own than I can when I’m alerting a few hundred people. It started with NVIDIA running straight at its $220 wall. Why

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The IBIT Call That’s Too Cheap

Hey trader, A call option expiration one day out can make a trade look like a steal. You risk a few cents for a shot at a big payout. IBIT, the ETF that tracks Bitcoin, has a call expiring tomorrow priced at about 39 cents. If IBIT reaches $47.50 tomorrow, that call is worth $1. If the move doesn’t come in one day, you’re done. I’d call that low risk and high reward with a very low probability. Every option loses a little value each day, a cost traders call time decay. A longer call option expiration gives your idea room to play out before the clock wins. That’s why I’d look 45 to 60 days out instead. An in-the-money call, with a strike below IBIT’s price, can also stand in for owning shares. I’ll show you how I’d pick that call option expiration and where I’d get out. It

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When My Hedge Doubled, I Waited

Hey trader, On September 23, I built a portfolio hedge for $100,000 in stocks, and it’s finally doing its job. One piece of it cost $1.56, and today it’s worth $3.11. A portfolio hedge is basically protection. It’s a trade that gains value when your stocks fall, so a selloff hurts less. When protection like that doubles, the urge to cash it in gets strong. Giving in to that urge can cost you. If you take a portfolio hedge off too early, you give up that protection right as the selling starts. SPY is only just moving into that selling phase now. I’m leaving mine on. I’ll walk you through how I’m managing it right now. You’ll see the level where I’d lock in a gain and how I’d roll it lower for a credit. I’ll also show you why I still want the market to go up. It starts

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What 5,000 Puts Said Before Earnings

Hey trader, Earnings headlines don’t always tell you how a stock will react. Even a comprehensive analysis of the report can still come up short. The options market, on the other hand, can provide a clearer signal than most traders realize. And once you learn how to read it, you’ll have a leg up on the competition. I saw this exact phenomenon play out this morning. Wells Fargo beat earnings and still fell right to $81. That might seem counterintuitive and random…but it wasn’t. Yesterday, I flagged about 5,000 Wells Fargo puts bought at the 81 strike for this week’s expiration. Still think it’s a coincidence? But before you start looking for big option trades leading into earnings, let me take you through my process to evaluate the two together. That way, you understand not only what to look for but how to read it. How I Screened the Bank

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What Kept Me Out of IGV

Hey trader, A block trade in IGV, the software ETF, moved 35,000 put contracts to a higher strike today. While that roll handed me a clear target price, I still passed on it. A big block tells you where an institution thinks price is headed. However, you still have to get in and out at a fair price. That second part comes down to liquidity. Without it, you may struggle to get in and out at a good price. Liquidity means enough buyers and sellers sit at a strike that you’re not overpaying just to get filled. This rolled block set a $107 target in IGV. Yet, a quick check of the option chain kept me out, and Verizon passed that same check. It only takes a brief moment, and can improve your options trading immensely. Here’s how it works. What I Check Before I Trade a Block I look

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How My Spreads Beat 50/50 Odds

Hey trader, I priced two vertical spreads in XLP, the consumer staples ETF, on the same two strikes. The one that pays off if XLP falls cost 88 cents. Its bullish twin cost $1.15. Both are in-out vertical spreads. That basically means buying one option and selling another, with the price sitting between the two strikes. If you hold one to expiration, it’s about a 50/50 bet. Without an edge, you’re paying for a guess. I lean on two edges to tip those odds my way. Skew, essentially the volatility gap between the option you buy and the one you sell, can get you in cheaper. A set rule for closing early raises your odds of leaving with a profit. You’ll learn to check whether a vertical spread is priced in your favor before you buy it. You’ll also get the exit rule I use to turn that even bet

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Macy’s Options Activity Signals Short Squeeze Potential

Hey trader, A big call buy in Macy’s (M) hit the scanner this morning: I want you to notice three things. First, the volume is roughly 3x the open interest. That’s a clear indication of new options hitting the tape. Second, the location shows all the way in the green. That means the trades hit the ask, or, that traders bought those calls. Third, the squeeze bar is nearly full, showing us there is a high amount of shares sold short in this stock. When a stock with high short interest starts to rise, it can cause a cascade of buying as short sellers close their positions by buying back the stock. This trade doesn’t go out far. But it fits with a larger rotation that could be starting out of the semiconductors and into the beaten down names. These calls aren’t too expensive, even sitting at-the-money. So, if you

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My XLP Trade Now Risks 4 Cents

Hey trader, On Tuesday, I bought a call vertical in XLP, the consumer staples ETF, for 60 cents. Two days later, it only had 4 cents of risk left. I could’ve closed the spread for over a 50% gain. Instead, I rolled my call vertical. Essentially, I sold off the bottom half of the spread and kept the top half. That roll paid me back 56 of my 60 cents. If XLP reaches $84, the half I kept can still deliver a 93% gain. Rolling a call vertical like this lets you skip the choice between grabbing a quick profit and holding out for the full target. You take nearly all your risk off and keep the upside working. But it’s not something you always want to do. There is a time and place for it, and I want to teach you what that is. It started with the money

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The Short Squeeze Setup Traders Are Watching

Hey trader, Two big call buys in TIC Solutions. Inc (TIC) caught my eye: Compare the open interest to the volume of these transactions and you’ll understand why they stood out. With January expirations, the buyer gave themselves plenty of time for today’s +8% move to continue. TIC carries 15.5% short interest, meaning about 1 out of every 7 shares have been sold short. That creates conditions for rapid buying driven by a short squeeze. The stock only has monthly options. Fortunately, they’re not very expensive. You can pick up those same January $10 calls for around $0.65 or the $12.50 calls for $0.20. This stock’s all-time-high sits around $15. Don’t be surprised if get enough buying to send us through there. If you’re not already subscribed, you can sign up for my free newsletter HERE. Take care, Brandon Chapman, CMT Creator of Ghost Prints Want to learn more about

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What Freed Utilities to Jump 2.5%

Hey trader, Utilities jumped about 2.5% today with very little help from the news. Most of that move traces back to what happens when a call wall breaks. XLU, the utilities ETF, had been stuck under two call walls at $40 and $40.50. A call wall is basically a strike with a huge pile of call contracts sitting on it. The dealers on the other side of those contracts hedge by selling into strength. Every push toward the wall runs into a seller. Once you know how to read a call wall like that, you can tell whether a rally is about to stall or about to run. You can also spot the walls that look big on the chain and barely matter. Today XLU broke through both of its walls. After it cleared them, that selling got out of the way, and price had room to run. Somebody also

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