Episode 350 lands on a wild day: Google is down about $40 after missing on earnings, the Nasdaq is down nearly 2%, the S&P about half a percent, and yet the Russell 2000 is up 1%. Bubba walks through what he’s trading and shows off a new tool. First, the scorecard. Another spread cashed — the Tesla call spread that expired the day before — bringing his record to 26 wins in the last 27 credit spreads. Then the scan. Most names don’t qualify: Apple reports next week, Amazon reports after the close, and many others are mid-range. Google, though, has dropped far enough to sell premium below it. Rather than expire the next day, he goes out to Monday, November 2: – Google 282.50/280 put spread for $1.00. He looked at XBI and SoFi but passed because there wasn’t enough liquidity or premium. His rule: if the credit doesn’t meet his parameters, he doesn’t trade. The new tool is an indicator he has built around his method. It flags trades when price is three standard deviations from its average on two timeframes, the conditions he has always traded, and it can be fully automated through Tradier for those who choose to. On screen, its signals from earlier that morning were all winners in the S&P and Nasdaq, with a few in gold and crude. His reasoning: at three standard deviations from the mean, price has roughly a 90% chance of reverting, so if you manage your stops and scale out — taking partial profits and moving the stop to break even — you give yourself a chance at a “runner.” By the time of the show, though, volume has dried up and the Bollinger Bands are narrowing, so nothing triggers. He’s wary of the Russell’s thin volume (about 900 contracts) — he doesn’t want to “be the market.” He notes the VIX is falling despite the selloff, which hints at a rally, and would sell the S&P near 7,765. Other levels: sell 30-year bonds near 108 and 10-year notes near 107, Bitcoin holding 80,000, and a gold buy near 4,000. He also mentions that options on some indexes and stocks now open at 7:30 a.m. Eastern, another step toward round-the-clock trading. Key takeaways: – Sell premium below a stock after a big earnings drop, with enough time and credit. – Skip trades that don’t meet your credit or liquidity rules. – Extremes of three standard deviations favour mean reversion. – Scale out to lock in gains and keep a runner. Trading involves risk. This episode is educational and not a recommendation.\ |
About Trading Live With Bubba
Trading Live with Bubba is a live-session show on the Tradier Hub YouTube channel hosted by veteran trader Todd “Bubba” Horwitz. Airing Tuesday and Thursday mornings, Bubba scans markets in real time, calls out credit spread and day trade setups, and teaches trading discipline through live narration.
