Yelp Stock And Options Renko Chart Position Trading

In the renko chart position trading scenario video, we discussed chart trade setups and the different trading decisions that would be made, depending on your position trading plan:  (1) do you trade a stock and options combination method (2) do you trade options selling strategies, only trading the stock for protection and covering short.

The actual chart we were discussing was a yelp renko trading chart that was used for making position timing decisions.  In this video, I want to now look at the yelp 60 minute position chart, and discuss the specific stock and option position trades that were done.

Renko Trading Charts

Renko Chart A

• At this point the position was long stock X long put-short call
• No additional options trades were done
• The long stock was initially held against the synthetic options short
  • And then exited at 97.10

Renko Chart B

• Short basis the options synthetic short
• Short yelp at 95.15

Renko Chart C D – 3-3-2014

• Sell 87p 1.90 3-14 exp
• Buy 96c 1.40 3-7 exp
  • Synthetic buy protection against short stock
  • Also gives put sell at further expiration after losing option shorts on 2-28
  • Buy yelp on reverse at 94.40

Renko Chart E

• Protect long stock on renko sell – further expiration call sells
  • Sell 104c 1.85 3-14 exp
  • Buy 95p 1.90 3-14 exp

Renko Chart F

• No new trades
• Long stock X short call-long put synthetic short protection

Renko Chart G – 3-7-2014 expiration

• Sell 105c 1.80 3-21 exp – goes to further expiration and replaces short calls that will expire worthless
• Have long put 3-14 exp
• Exit long stock 97.85

Position Trading Chart

3-10-2014 to 3-13-2014

• Red dot1 – short yelp 96.65
• Yellow square1 – support reject and renko reverse
  • Sell 85p 1.45 3-21 expiration against short stock and long put from renko E would complete ratio put short
  • But Sell 95p 7.20 to close
  • Did not end up buying calls – this was a function of the call price and resistance
    • I would have bought 95c
    • I do get short protection from the put sells – but you can never have synthetic protection from an option sell only
    • Resistance reject and renko base setup
    • Red dot2 – resistance reject and renko base sell
      • Short yelp 90.85 addon
        • Would remove any profit cap from short stock-short put after closing long put
        • And will also allow for another put sell that will be covered – nothing was done as there was a support breakout instead of double bottom reject
• Sell 95c 1.40 3-21 expiration
  • Additional short calls from the resistance reject and renko sell
  • These calls are more price sensitive considering the other shorts are 105c – will long to close those for a profit

The closing yelp stock and options position is very directional to the downside:

• Multiple call shorts with no long calls
• Short stock-short put is above cap at 85p sell 1.45 = 83.55
• Short stock addon