NQH1 Trade on Jan 28, 2021 15:41 from Marius: Tradervue User Stock Trades.

Last week of the trading month with markets picking up with volatility and after big tech earnings. First large sell-off this week seen in the last 3 months. Was broadly bought today by the market with rotation within the QQQ's. Noting recent NFLX, MSFT, and AMD post earnings profit taking but bought up today. With AAPL, TSLA, & FB selling post earnings. Anticipating a similar reaction of profiting then buying after which part of the trade thesis.

Fundamental Analysis

With big tech earnings this week I'm trying to recognize the rotational flow of the institutional and portfolio managers making capital moves. Good to great earnings have been followed with profit taking and currently being bought shortly after. Globally markets are starting to loose momentum but uptrends in tack. No current critical signs of reversals but sentiment may be of concern. Seeing short squeezes and lots of attention on GME, social media, and the institutional short sellers leading to more cause of hedging and broad selling.

Quantitative Analysis

Intraday Fundamentals

RVOL 1.2379
AVOL 497.673k
ATR 254.07
Short Float 11.83%
Shs Float -
Inst Own -
Market Cap -

Options Statistics + Tape Reading

SI 6.101
IV 33.57%
IVP 28%
P/C 1.155
VWAP 13185.568

Notable put buying BID with call buying at ASK. The delta's on the put reflected more in the 0-20. Large call buys at 13500+ with put selling in the 13200 and 10650's. This is the opening session. Also noting this is EOM option contract.

(Tape recorded but not included)

Options Positioning

OI S 238 L 386
VOL S 276 L 124
Delta S -.06 L -.03
Theta S -7.18 L -3.59
Vega S 1.11 L .59
Gamma S .00 l L .00
Prob T S 11.79% L 5.52%
Prob ITM S 5.93% L 2.78%
MMM +/- 207.66
IV Series 28.53%

Noting model adjusted aggressively into the close and throughout the overnight markets selling off. The options positioning is critically outside of normal trading parameters with the new move. Drawdown on position is critical and within an ATR reach + ~20% probability ITM short strike. Keeping in mind this was a flipped directional bias after seeing the capital flow at the open and during US market hours. The next days open market hours will be notable to the trade.

Technical Analysis

Volatility spike accompanying more volume done on the ASK then BID. implying aggressively buying. The selling EOD and into overnight markets was a concern and more so with overnight markets with more selling increasing risk onto the position.

Notable VPOC areas in the past 1M overview. Logical area for supply to be supported and buyers to step in however burden is to the buyers at the support level.

Trade/Risk Management & Review

Trade closed incredibly within a close margin. I was pushing my trading to the next level with trades I have been working on and been consistent in my stats. The notional value on my trade was 2.52M with multiple hedged option contracts. It was scaled within my defined process of trading. This was a B set-up and probably should have saved the scale up for an A trade set-up in my playbook.

One major thing I left out was not recognizing the EOD sell off after the AM buying session. I came into the day with a short thesis but changed seeing a "buy the dip" broad based bid. The EOD sell-off was a critical detail I left out which should have had me flip my thesis back to short. I need to zoom out and pay attention to my previous playbooks. The trade drew down more than any other active trade in my career when the overnight markets were selling off. There also may be a liquidity factor I'm overlooking when monitoring position developments during this period. I did not exit the trade because I wanted to see how the price action would be in the morning open and at around 12950 support level. Support flushed and I had alerts set to monitor at different levels. The markets found a re-bid and notably changed the trade dynamics and put more favor in the original trade. 12700 was my short strike and momentum was strong after that initial 13000/12950 flush. These will be additional key areas next week.

I had plans to add additional hedge positions but the market had bounced already and theta decay was accelerating as an EOM option.

I'd grade the trade as C as this trade could have ended with a discouraging unplanned drawdown. However sticking within my consistent process I kept my position within normal risk parameters and it had some room for some mis-calculations.

This week was quite eventful with notable short squeezes taking place. This is being engaged with other market participants that are not as well informed on a professional level of trading so my trade judgment may have been skewed.

The combined overlooks/mistakes for the trade had potential developing critical consequences. Keeping this in mind as I continue trading through earnings season and new developments in the market. The trade had placed me in an uncomfortable position as it developed but I was able to think things through, re-evaluate, and make sharp decisions.

Going back to a previous saying in recent trades where I have been in the same situation,

"If it doesn't challenge you, it doesn't change you."

Grateful for the opportunity to continue developing my career, contributing/educating other traders/communities alike, and learning/applying from other great traders.

Note : Markets look to be changing its current regime. Be open-minded and flexible going forward. Scale back trades and be super selective until there are clear set-ups and market themes.