Summary

SPY 590/580/560 Finance Bear Put Spread: Stephen Cox discussed the SPY trade, a finance bear put spread, noting uncertainty of the downtrend's continuation. They are currently up $118 per contract and considering selling the $590 long put, but are hesitant given the potential for a market reversal. The decision to sell the $590 put will depend on whether the market breaks above the 50-day moving average; if so, they will wait until Tuesday when markets re-open. If we sell the $590 put, we will be left with the $580 and $560 short puts. We will consider closing out the $580 ‘short’ put next week depending on market conditions. There is a possible profit of $796 plus the initial credit per contract on this trade. Nanik Hotwani also holds a similar trade but $10 lower on each strike. Stephen Cox advised them to close the $580 long put if the market trades above the 50-day moving average on Monday.

TLT Trade and Interest Rate Outlook: Stephen Cox reviewed their TLT trade, currently profitable due to dropping interest rates , but would prefer assignment believing interest rates will stabilize between 4% and 5%. They are not yet ready to adjust their short put position at $84 and open a short $85 put position. Nanik Hotwani, having a cost basis of 85.42 buying TLT and currently in profit, questioned whether to sell or average in more at 83-84; Stephen Cox advised waiting for a rebound in interest rates to exit. Richard Fitzgerald holds a February 21 put at 84 and is in unrealized profit; Stephen Cox recommends holding onto this trade and waiting for potential assignment at expiration.

Euro Dollar Trade: Stephen Cox noted the Euro dollar stabilized around 1.03 despite weaker-than-expected CPI data. Those who sold puts at parity for March 7th expiry are in profit and will see increased profits as expiry approaches. They are in a clear downtrend, and adding more euro dollar currency futures is not recommended until the downtrend reverses. The best strategy is to sell put options on currency futures at parity.

Equity Scan and Stock Discussion: Stephen Cox discussed several stocks identified on their equity scan, including Entain, a betting company, that showed a 5% increase after reiterating their guidance. They consider it a long-term investment rather than a trade. They also mentioned First Solar, which received an analyst upgrade, and Vestas Wind Systems, which held up better than expected despite negative comments from Donald Trump. Nanik Hotwani asked about buying UK shares from a USD Interactive Brokers account; Stephen Cox explained that Interactive Brokers would lend them British pounds, but they should immediately convert the negative balance to avoid interest charges.

Reversal Trades and Trading Platforms: Stephen Cox explained their reversal trade strategy and highlighted the use of a spread betting platform (like IG Index) for tax-free short-term trading and Interactive Brokers (IBKR) for investing. They demonstrated how to place trades on both platforms, detailing how to use IBKR's "attach orders" feature to set profit takers and stop-losses simultaneously. They reviewed several stocks on their reversal trading watchlist, including Gen Digital (suggesting profit-taking), Morning Star, Oracle, Palo Alto Networks, T-Mobile, and DSV. They emphasized the importance of daily updates, including provided stop losses and target sell prices. They clarified the dynamic nature of holding periods for reversal trades, noting the influence of news and market sentiment alongside predefined profit targets and stop losses. They also discussed RWE, a German wind power company, noting the potential impact of Donald Trump’s policies and recommending a potential walk-away point for traders.