BSC - Intraday Play

Heard from CNBC on last Fri (pre-market) that BSC was pursuing financing from the Feds through JPM. Apparently they had liquidity problems. This kind of news typically offered a significant jump in the stock prices.

A quick assessment at that point of time, offered 2 possibilities:

1. The market takes the news positively since the Feds and JPM were extending a life-line and end BSC liquity problems. The stock gapped up. (Probability = unlikely)
2. The market takes the news negatively (Probability = likely). The stock gap down at opening hour. From here it offered some other possibilities. One, after gapping down, it stabilises it will not go beyond the first 5-min candle. Two, after gapping down, the market is still digesting the impact of the news. It later either goes down further or go up and close the gap.

So I waited and watched the market made its move. In a 5-min chart, the first candlestick formed was long, then an inside bar was formed. CNBC (I considers them as cheerleaders) could not provide anything positive about the event. I was ready to play my move then - Playing the Inside Bar strategy (even before 10am EST).

• Bought BSC Mar 45 Put @$4.00 (when the stock was around $51.00). The Bid/Ask spread was huge then.
• Sold BSC Mar 45 Put @$16.00 (when the stock is around $31.00) within 30 mins. Profit = A Cool 400%.

PersianCat (Millionare-in-progress)