Welcome back everyone. 1
In the previous lecture we have analyzed the chart of Facebook incorporation. Facebook was resisting 2
this zone. 3
This zone is a very strong resistance zone for the Facebook and you can see prices were not able to breach 4
this zone in upside. 5
and currently prices are trading below this zone and today is 16th of May 6
I have bought the call option of Facebook incorporation for the expiration date of 17th of May and tomorrow 7
is the expiration date. 8
So here my trade is successful you can see prices are trading below this resistance zone for which I 9
have sold the call option of Facebook incorporation if we see the option chain of 17th of May I have sold one 10
ninety seven point five call option that was trading at one point seven five dollar and now it is trading 11
at zero point zero two dollar. 12
So we can buyback this call option and I bought the two hundred five call option 13
Now this call option is trading worthless so here in this trade our net profit is 130$ 14
per lot and in this trade our maximum loss was 6.2 dollar. 15
So our risk to reward ratio was not good but as we were getting here strong signals of consolidation. 16
See this level was 261 percent level of Fibonacci grid and this lower level is 17
another resistance level. 18
So by joining these two levels this zone is a strong resistance zone for Facebook incorporation. 19
Now at this zone there was a shooting star candle and RSI was giving a negative divergence moving 20
average set was also giving a sell signal. 21
So all the signals were bearish signal. 22
That's why I sold the call option of Facebook incorporation because I was expecting a consolidation in 23
the prices after this sharp up move from this support zone. 24
to this resistance zone.