$5 Trillion Triple Witching OpEx Day. Gap Up Reversal Trade Setup - I love you. SPY closed the day red, is that the top? My Trade plan for Friday Dec 15.
$5 Trillion Triple Witching OpEx Day
Today, options contracts worth over $5 trillion are set to expire, triggering a high-volume "triple witching" event. The expiration will coincide with the rebalancing of the S&P 500 and Nasdaq-100, potentially leading to extreme volatility in the market. Traders will be cashing in bullish bets and rolling their positions, while index-tracking fund managers will adjust their holdings before the announced index changes take effect. The trading volume has already been trending higher all week, with 17 billion shares changing hands on Thursday, the highest level in a year. This event is expected to be the largest option expiration of the year and could result in a record-breaking session for popular names in the market.
Gap Up Reversal Trade Setup - I love you
Process Process Process. Given the gap up yesterday. We needed to look for a gap up reversal setup as well as BTFD trades.
We got short around 4-5 on SPX 4520c for an eventual dip into $10. The the morning BTFD/grind started. But here is the thing — on large gap up reversal days, we need to watch for an afternoon flush to develop if we double top the morning highs. An that short setup played out fast!
I just got out of the shower when the selling began, and missed the entries that could have got me 20 to 50x. I had to settle for to 2 to 5x. So pissed about being 10min late to the screens.
I shared this for targeting. So that 471.50, that still gave us some room for the downside and placed an order for SPX 4710p for 2.50 that didn’t fill and took SPX 4700p for $2 that did fill with target sells of 5,10, 15-20. We got to $10 for 5x
Really underperformed. I would have loved to scoop the SPX 4720p for $1-2 which hit $25. Talk about an expensive trip to the shower!
I gave members this heads up in the late afternoon on the flush.
Why? Every gap up reversal day which normal leads to a day 2 red has ended up squeezing for the last 7 weeks. So I am getting prepared and we get super cheap risk reward scoops for an up side move.
Based on Volume I also expected a close near or above 4720 on SPX so this let me plan the following trade.
The 4720c dipped right to 0.20 and then hit $1 before going to 0. that is 400% gainer!
The 4715c dipped right to $1 and then hit 3.80, dipped to $1 again and closed around 4.50 for 300%+!
I LOVE TO PLAN TRADES. with planning and excellent targeting, incredible returns can be achieved!
Swing scalps
Tuesday dip buys gave us 10x on AAPL 197.50c from 0.20 hitting 2.20 yesterday morning on the gap up.
TSLA dip buys on gap down reversal swing on 240c from 1.50 hit over $12 yesterday.
Congrats all!
Trade Plan for Dec 15
/ES is gapping up and testing yesterday highs, no surprise there, we might even go wildly higher today or nowhere.
One thing that is interesting is the SPY has below yesterday’s close while /ES is up. I’m assuming that is due to opEx/dividend. SPX I’m showing as gapping up +13.
Overall with the amount of money/positions tied to today’s expiration, I’m expecting a wild chop today eventually leading to more highs. I could be completely wrong on that. we could also just end up pinned. I expect both sides of range to be tested once at possibly twice before a trend forms if one is going to.
Like always, this is only conjecture - sometimes my thesis is crazy right and other times wildly wrong. All we can do as traders is be prepared with bull and bear cases and use the price action/trades setups with key levels to give us an edge in our trading. We then need to be systematic in our sizing and take profit/loss process.
I’ll be looking the following “yolo” trades if dip buy setups come in.
AAPL 197.50c for $0.30
AAPL 200c for $0.10
SPX 4735c for $2
NVDA 487.50c for $0.50
TSLA 255c for $0.50
I’ll be looking the following “yolo” trades if support breaks.
SPX 4700p for $2
SPX 4690p for $1
My primary focus today will likely be credit selling and I’m making it ok to not open any trades. It’s been an incredible week. Why ruin it?
WARNING - OPEX DAYS are dirty. Consider not trading today if you have a history of losing on OPEX days.