Cobra Trades

Cobra Trades

Cobra Trades

MARKET OVERVIEW
Welcome to another weekly update into the BlackBoxStocks community. As for the market this week, Friday is a holiday so this is only a four-day week. This can result in choppy and less-than-ideal trading conditions. Overall, this is what happened with the four days this week trading in an eight-dollar range. Elon Musk continued to grab headlines by offering to buy Twitter outright and taking the company private. In fact, Twitter was a main focus of much market discussion this week. On Thursday another buyer offered 60$ per share to take the company private, and it seemed as if much of the financial world was focused on Twitter, for better or worse.

INSIDE THE BOX
Monday was one of those days where small cap, low float stocks have runs. That was the day our system alerted the ticker VERU right before it had a large move to the upside. Many users reported taking contracts from .30 to 3.50 or more. This was a great move to be a part of on this day. VERU continued to have volatility and range throughout the week culminating in swinging sharply to both the downside and the upside on Thursday complete with halts. PTON also experienced a halt, and there were pockets of intraday range opportunities throughout the week.

Many of our traders were engaged in our Discord BBS trade room, the Roadhouse, and a new Small Account Room. Additionally, the main chat in the member’s area of the website featured a lot of option flow discussion. Delta Airlines had a profitable flow this week, and other airlines reacted as well. Some of our traders followed the DAL flow to profit with members benefiting as well.

One thing that is a fun feature in the BlackBoxStocks community is what some of our moderators call 500% Fridays. This is simply some responsible partaking in a trade that has been labeled a “cobra.” A cobra is a 0DTE option contract that is priced low enough that a trader can enter into it without any real financial stress. All cobras are by their very nature risky as can be, and it is understood that there is a very real chance a trader could lose all their premium relatively quickly. This is heavily reiterated by our moderators as they discuss possible setups for cobras and enter into them on the last day of the trading week. The term “500% Friday” is simply a nod to the reality that if a cobra goes your way, the leverage inherent in options and the low purchase price due to theta being so heavily advanced in these quickly waning options can result in big gains. This is, mind you, simply a bit of fun at the end of the trading week and it is not suggested as any sort of regular trading strategy. However, since this week was a short week, cobras were played on Thursday in tickers such as Tesla, SPY, Twitter, VERU, and others. It was a choppy week, but working together as a team we found success each trading day.

I hope you had a great week trading this week, and thank you for reading the BlackBoxStocks blog.