VMW Call Spread traders are making money

Another great week for Warrior Swing Traders in the community. After a sad loss on WYNN last week, we rebounded with fantastic trades on the $KBH put sweep and the $UHS news trade. The latest of those fantastic trades comes in the form of a $VMW call spread that netted us 30% return on our investment in just a few days. This was a trade that a student had brought to me. The idea is, the stock is in an obvious up trend and not looking weak, so, why not use the pull back as an opportunity to enter and ride it back up? Well, I couldn’t think of a reason not to. Remember, as traders our job is to identify possibilities, but rule out anything but the most certain. This is where good technical analysis ability comes into play. Seeing opportunities where others may not is what gives us an edge. So, props to this student.

In the video recap, I talk a bit about volatility, for those not completely familiar with options, spreads or terminology, be sure to check out www.warriortrading.com/options for more information. The $VMW call spread was a great example of a pull back entry on a stock with relatively low implied volatility (good use case for options), in a strong uptrend making higher lows, testing key technical support and resistance areas which gives us a clear path and target for execution. The video below will give more detail. Remember, when trading options, they are leveraged and can be super dangerous, but they can also provide small account traders with opportunity to trade clean, large cap names like VMW, that these traders may not otherwise be able to participate in, and therefore, lose money.

Recap Video $VMW Call Spread

Video length: 00:06:12