The U.K. and EU are reported to have reached a draft deal on Brexit. Theresa May will hold a Cabinet meeting today at 2:00 p.m. London time (9:00 a.m. ET) in a bid to persuade her closest ministers to back the “technical agreement,” which likely centers on the Irish border and temporary customs arrangement. It’s a long road ahead. Even if she gets their support, she’ll have to get the majority of parliament to back the proposal.
Let’s consider Alteryx, Inc. (Ticker: AYX):
This is a classic set up of one of my favorite technical triggers, the Inside Bar (IB). The concept is quite simple. This is a three bar set up. I use this as a swing trade methodology so I am using a daily chart. An “IB” is set up when yesterday’s high and low price is “inside” two days ago high and low price. If that sets up you have an IB. An IB buy is triggered when today’s price is 1% higher than yesterday’s high price. That is your signal to get long. Conversely, an IB sell is triggered when today’s price is 1% lower than yesterday’s low.
In the example above with AYX, the buy trigger price is $57.25.
I am going to play this bullish trigger with options. You can consider the AYX December 21st 50/55 put spread; selling it for $1.50. The most you can gain is the premium collected and the most you can lose is the width of the wider spread less any premium paid. Max risk = $3.50 and max reward = $1.50
This means that you are laying odds of 2.33:1.