How Rebels Traded the 52 Week High in Costco Stock With 0DTEs

How Rebels Traded the 52 Week High in Costco Stock With 0DTEs

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In the midst of the stock market’s steep run-up, while most traders were focused on the mega caps, Rebel Pit traders had set their sites on a less-expected stock: Costco. 

In Rebel Pit Elite (Market Rebellion’s premier day-trading room), skilled analysts, former floor traders, and Rebels unite to trade options with very short timeframes. This trade in COST, made on Friday November 10th, was as short-term as short-term gets — 0DTE. This means the option expired the same day it was bought. For less experienced traders, this can be very risky — but for those brave enough to try, it can also yield powerful profits. 

Every Rebel Pit Elite trade comes with a plan, and that plan always has the same key ingredients:

A trigger. The trigger is where traders should enter the trade if price rises to that level. In COST’s case, it was $569.00. These are often important levels that, if broken above, can result in a powerful stock breakout where price must be discovered. That’s exactly what happened here.

Next, every plan comes with target levels. These are areas where buyers should seek to roll their trade in an effort to lock in some cash while remaining in the trade. By doing this, we can mitigate our risk, and if all goes well, get to a point where we’re only trading “house money” — money we made in the trade itself. In the case of this COST trade, these levels were $571.27, $572.65, and $574.64. Like the trigger level, there are often flatlines that may prove to be resistance (or support) as we move through our post-breakout price discovery.

Lastly, we have our exit plan: In this case, if the stock fell back below the trigger, or the option lost 50% of its purchase price, we would exit humbly and move on to the next trade. Luckily, that didn’t happen here. Instead, here’s how our COST trade panned out:

In this case, traders had three separate opportunities to lock in at least some profit throughout the trade, with an opportunity for a 100% increase in option price occurring within about an hour of the initial trade. However, if they never chose to roll any of the options, they would have been fine as well, with an option that they bought for roughly $2.40 expiring at a value of roughly $9.58 – two cents shy of a 4X return as Costco continued to rally to a new 52 week high. On the next trading day, Monday, the options had expired, but Costco continued to rally, setting another 52 week high.

This is what we do inside Rebel Pit Elite. Want to know more? Talk to a trading coach today about how you can give Rebel Pit a spin.

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