One exciting feature that sets the BlackBoxStocks community apart is a weekly trading event our moderators fondly term “500% Fridays.” This event embodies the thrill of trading, yet underscores the importance of strategic and responsible trading decisions. While not a recommended regular trading strategy, 500% Fridays introduce traders to the dynamic world of cobras.
What Are Cobras in Options Trading?
A cobra, in the context of the BlackBoxStocks community, is a 0-Day-To-Expiry (0DTE) option contract. These contracts are priced low, allowing traders to participate without substantial financial stress. The catch is that cobras are inherently risky. There’s a real possibility of losing all the invested premium in a short span. This aspect is repeatedly emphasized by our moderators, especially when discussing potential setups for cobras.
Cobra Trades: A Roll of the Dice
Cobras come into play on the last day of the trading week, setting the stage for 500% Fridays. This terminology acknowledges the fact that if a cobra trade swings in your favor, the combined effect of the leverage in options and the low purchase price (thanks to advanced theta in these rapidly diminishing options) can lead to substantial gains. Remember, this is merely an end-of-week fun activity and not a long-term trading strategy.
The Thrill of Short Week Trading
Trading weeks aren’t always standard. Sometimes, they are shorter, like the recent week when cobras came into play on Thursday. This day witnessed trades in various tickers, including Tesla, SPY, Twitter, VERU, among others. Even though the week was choppy, the collective effort of our team led to success each trading day.
Trading Responsibly and Enjoying the Ride
While 500% Fridays can be an exciting event, it’s crucial to remember that every trade carries a risk. These events are meant to add an element of fun to trading while serving as a reminder of the importance of responsible trading strategies. It’s not recommended as a regular trading strategy but rather an opportunity to understand how market dynamics can influence trading outcomes.
We hope you had a successful trading week, and we thank you for being a part of the BlackBoxStocks community. Continue to learn, trade responsibly, and enjoy the ride!