What gets a trader excited? There are lots of things, but one thing for sure is a game changer.
There is nothing worse for a trader than same old, same old. So, when things change…it’s game on! Let’s look at a break out set up in Citrix Systems (CTXS).
Take a look at the chart in Figure 1 below.
What you have here is what is known as an inside bar with subsequent break out. The inside bar is circled. It’s a trend confirming break out play. So, in this case, once the high of the inside bar is breached by 1% or in this case $85.16, that is your entry point. Using the implied vol for July expiration, the priced in move suggests a move to between ~89.50 – ~$91.00. Thus a bullish move to consider could be the following:
Buy (opening) the CTXS July 87.5 call
Sell (opening) the CTXS July 90 call
For a debit of $0.75 or less.
This signal is not GTC and is valid with CTXS trading $84.75 or higher
This affords you a reward to risk ratio of 2.33:1 while giving you about a month for CTXS to take out its recent highs.
