KMX Trade on Dec 22, 2020 10:39 from tradelikelarry: Tradervue User Stock Trades.

Trade Planning:

• Daily Chart: Uptrend, Consolidation below its ATH.
• TTM Squeeze: N/A
• Earnings Date: 12/22/20
• Potential Profit: $250
• Potential Loss: $3535

Reason For Entry:

• Playing the Daily chart, Put Credit Spread. This is an earnings play as we are betting that price action will maintain above our profit level ($90) after earnings are released tomorrow. The profit level is in line with a key support area. Nice risk to reward overall.

Reason For Exit:

• Earnings were released and KMX beat. Price action flushed out but maintained above our profit level at expiration. The PCS expired worthless and we collected 100% of the premium.

Recap:

• This was a Put Credit Spread earnings play. Our entry was at the 8 EMA and 21 EMA area as price action took out a resistance level prior to the earnings release. We were betting that price action would maintain above our profit level ($90) after the earnings release. KMX beat on earnings and price action flushed with a huge bearish belt hold candle. Fortunately price action maintained above our profit level at expiration and the PCS expired worthless as we collected 100% of the premium. Notice how price action decreased substantially after our initial entry and we continued to collect 100% of the premium on the trade. This shows the beauty of Put Credit Spreads.