AMZN - Bear Call Spread, leg into Iron Condor
My trade idea is as follows
Observations
- 20 EMA crossed the 50MA
- 100MA didn't hold
- 200MA will probably be the next level of support, around 2680. This will be the next target.
Proposed trade
- Start with a bear call spread with the short leg at 3,600. You can then buy a call 50-100 points above that.
Risk management
- Monitor how the trade goes. If it continues to go down, add another position 200 points below, such as 11,850.
- If the stock moves higher, then we can roll the call once the short call leg stays 30 delta two days in a row.
- At the same time, on the bottom side, we can leg in on the put side, turning it into an iron condor. The bull put spread's position is TBD as I wouldn't want to put on a short spread when there's no clear indication where the next level of support is. Rather... then next level of strong support would be the 200 MA, which is at the 2700 level. It's going to be a while before that gest reached. If it approaches that level, then setting a short put leg 50-100 points below the 200 MA would be a good safe trade.
Observations
- 20 EMA crossed the 50MA
- 100MA didn't hold
- 200MA will probably be the next level of support, around 2680. This will be the next target.
Proposed trade
- Start with a bear call spread with the short leg at 3,600. You can then buy a call 50-100 points above that.
Risk management
- Monitor how the trade goes. If it continues to go down, add another position 200 points below, such as 11,850.
- If the stock moves higher, then we can roll the call once the short call leg stays 30 delta two days in a row.
- At the same time, on the bottom side, we can leg in on the put side, turning it into an iron condor. The bull put spread's position is TBD as I wouldn't want to put on a short spread when there's no clear indication where the next level of support is. Rather... then next level of strong support would be the 200 MA, which is at the 2700 level. It's going to be a while before that gest reached. If it approaches that level, then setting a short put leg 50-100 points below the 200 MA would be a good safe trade.
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