Traders,

Last night’s Coaches Show focused on the mighty bear call spread. It’s a strategy that’s been working quite nicely over the past month because the market is stuck in the mud. And, if there has been a directional bent, it’s been lower in most areas outside of large-cap tech. That’s good for the bear call too. Here’s a quick primer on the strategy.

• Structure: Sell a lower strike call while buying a higher strike call in the same expiration month.
• Time Frame: Sell 30 to 45 days.
• Delta rule: The short call delta should be less than 0.20 delta
• ROI rule: Get at least a 10% ROI. That’s 50 cents on a $5-wide spread or $1.00 on a $10-wide
• Target idea: Exit when you capture 80% to 90% of the max reward
• Stop idea: Exit if the stock rises to the short call strike.

We used IWM as an example in last night’s class and built a June $181/$184 bear call spread for 51 cents credit. It has a probability of profit over 80% and still boasts a 20% ROI.

If you want to learn more, jump in a traders’ lounge and ask about the strategy or check out the overview video in our Tackle Trading Playbook.

Apple Market Cap

Source: @WillieDelwiche

Chart Copy: Amazing stat alert! Did you know Apple is worth more than all 2,000 stocks in the Russell 2000 Index combined?

Traders Lounge 11 AM EST

Join the coaches in this live lounge, ask questions, discuss ideas or just sit back and listen to veteran traders discuss market conditions.

The Coaches Show Replay

If you missed last night’s episode or would like to watch it again, check it out here.

Halftime Report 12:30 PM EST

The Halftime Report starts at 12:30 EST and covers what news is driving the market, chart analysis from the movers and shakers of the day, and fun in a way that the coaches at Tackle Trading can deliver.

Trade Masters 7:00 PM EST

Every Wednesday at 7 PM EST join us on the Trade Masters where two Coaches go head-to-head to see who can find the best trading setup.

Financial freedom is a journey

Sign up now and gain unfettered access to all of the quality content and powerful Scouting Reports that our Pro Members enjoy for 15-days absolutely free with no strings attached and let us show you what your trading has been missing.

Legal Disclaimer

Tackle Trading LLC (“Tackle Trading”) is providing this website and any related materials, including newsletters, blog posts, videos, social media postings and any other communications (collectively, the “Materials”) on an “as-is” basis. This means that although Tackle Trading strives to make the information accurate, thorough and current, neither Tackle Trading nor the author(s) of the Materials or the moderators guarantee or warrant the Materials or accept liability for any damage, loss or expense arising from the use of the Materials, whether based in tort, contract, or otherwise. Tackle Trading is providing the Materials for educational purposes only. We are not providing legal, accounting, or financial advisory services, and this is not a solicitation or recommendation to buy or sell any stocks, options, or other financial instruments or investments. Examples that address specific assets, stocks, options or other financial instrument transactions are for illustrative purposes only and are not intended to represent specific trades or transactions that we have conducted. In fact, for the purpose of illustration, we may use examples that are different from or contrary to transactions we have conducted or positions we hold. Furthermore, this website and any information or training herein are not intended as a solicitation for any future relationship, business or otherwise, between the users and the moderators. No express or implied warranties are being made with respect to these services and products. By using the Materials, each user agrees to indemnify and hold Tackle Trading harmless from all losses, expenses and costs, including reasonable attorneys’ fees, arising out of or resulting from user’s use of the Materials. In no event shall Tackle Trading or the author(s) or moderators be liable for any direct, special, consequential or incidental damages arising out of or related to the Materials. If this limitation on damages is not enforceable in some states, the total amount of Tackle Trading’s liability to the user or others shall not exceed the amount paid by the user for such Materials.

All investing and trading in the securities market involves a high degree of risk. Any decisions to place trades in the financial markets, including trading in stocks, options or other financial instruments, is a personal decision that should only be made after conducting thorough independent research, including a personal risk and financial assessment, and prior consultation with the user’s investment, legal, tax and accounting advisers, to determine whether such trading or investment is appropriate for that user.