Friday, October 12, 2018  1:56:06 AM

Monster Reversal

by Jim Brown

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Review prior updates here: 2014  2015  2016  2017  2018 
With the S&P futures up +35 tonight it appears we will have a positive Friday. That would be a relief given the market direction over the last week. The major indexes have all broken through short-term support and some appear to be headed for long term support at significantly lower levels.

It remains to be seen if any potential Friday rally is just a dead cat bounce or a real rally. The first two weeks of October tend to set the lows for the second half of the year. A week ago I would have said that was not likely to happen but I did write about the trend.

Everything crashed again on Thursday despite some time in positive territory in early trading. This is the second consecutive day for declines oif more than 2%. The S&P at 2,728 is roughly 200 points below its recent high and only 28 points from the critical 2,700 level.

The Dow transports have fallen -11% from their recent highs, which is contrary to conventional wisdom given the strong economy. The Russell 2000 is also down -11% because small caps can be hurt worse by rising rates.


There were some pockets of strength on Thursday with Microsoft and Intel only down a few cents compares to the major declines in other tech stocks. There is an interesting crowd at the bottom of the Dow list with HD, a major benefactor from the two hurricanes, posting a big loss. Boeing, which has been outperforming when there are no tariff headlines, declined today after news broke that President Trump would meet with President Xi at the G20. That should have been good news. Energy stocks were down because oil prices imploded when the hurricane did not cause any damage in the Gulf and inventories are moving higher.


Facebook was actually positive on Thursday. That should be a sure sign the selling is almost over. Apple declined to $214 but that is just slightly below strong support at $216. The Google twins only posted minimal losses after a couple weeks of persistent declines.


The Russell is typically considered the sentiment indicator for fun managers. If that is the case they should be rushing to the exits. The Russell has broken all short-term support and the longer-term 200 day average. The congestive support from early 2018 is just ahead and maybe we will see a bounce that sticks.


I believe the S&P came close enough to 2,700 that a rebound was born. This should be critical support and with the futures up 45 points that would catapult it well over 2,750 and possibly on a path back to higher levels.


The $VIX spiked to almost 30 today and that is typically a capitulation event. Volatility slows, the tensions ease and a new rally is born. Sometimes it takes longer than others do but that is normally the case. Tomorrow would be a good opportunity to short the VXX. It always returns to single digits.


With 300-500 point swings becoming more common, it is dangerous to sell premium unless you are watching the market closely. When individual stocks are moving $5-$10 a day in alternating directions you are just flipping a coin on whether you will be profitable of not. Be patient and look for a fat pitch that you can hit for a win. Don't swing at every pitch that is thrown.

Enter passively, exit aggressively!

Jim Brown

Send Jim an email



Current Portfolio


The fourth column in the portfolio graphic is the earnings date. We will always exit a position before that date unless specifically mentioned otherwise in the play description.

Lines in blue were previously closed.

Current positions



Current Position Changes


FB - Facebook (Nov Put Spread)

We were stopped out of the short side the prior week on the news of a new hack of 50 million accounts. We retained the long put and we were rewarded when shares fell in the Nasdaq crash.

Closed 10/5: Nov $150 long put, entry $2.41, exit $5.40, +2.99 gain.
Previously closed Nov $140 short put, entry $5.50, exit $6.45, -.95 loss.
Net gain $2.04.

We were also stopped on the lower put spread.

Closed 10/8: Nov $140 short put, entry $1.83, exit $2.48, -.65 loss.
Close Nov $130 long put, entry $.79, currently $1.43, +.64 potential gain.



MED - Medifast (Nov Short Put)

We were killed on MED and the stock barely moved. It opened down $1 on the 8th then dipped lower as the day progressed. We were stopped in the opening minutes before there was any major decline but the short put opened at $13 and twice the premium we sold. This was a $180 put with the price at $212. The market makers were taking advantage of the week market to jack up the premium. We were caught in the trap.

Closed 10/8: Nov $180 short put, entry $4.70, exit $13.90, - 9.20 loss.



TSLA - Tesla Inc (Nov Short Put)

Thank you Elon Musk for being an idiot. This would have been a great put position if Musk had kept his mouth shut. (tweet) He launched an attack on the SEC and shares gave back all their rebound gains. We escaped with a gain ourselves but it would have been much nicer had Musk lost his phone.

Closed 10/5: Short Nov $200 put, entry $7.43 exit $5.90, +1.53 gain.



AAPL - Apple Inc (Nov Put Spread)

The Nasdaq crash stopped us out of the short side on the Apple position. I am recommending we close the long side because Apple is going to rebound in any positive market.

Closed 10/5: Nov $210 put, entry $2.67, exit $4.10, -1.43 loss.
Close Nov $200 long put, entry $1.47, currently $4.70, potential gain $3.23.



NVDA - Nvidia (Nov Put Spread)

Nvidia imploded in the chip wreck that was helping to drive the Nasdaq lower. We were stopped for a big loss on the short put when the Nasdaq gapped down on Monday.

Closed 10/8: Nov $250 short put, entry $3.67, exit $9.00, -5.33 loss.



New Recommendations


None

I am not brave enough to sell premium in this market. We appear to be poised for a blowout open on Friday and that will deflate all the put premiums before the market opens. If the rebound rolls over the put premiums will shoot higher and we could be in a loss situation in just a couple of hours.

I did go through my complete scan and there are some potential plays in the lists below. Tech has been so beaten up that it should be the first to rise.


New Covered Call Recommendations


No New Covered Calls

With the Russell down 11% from its high and 85% of all stocks having bearish charts, it should not be a surprise that there are no covered calls this week. However, if we do get several dayss of rebound we should have a lot to choose from next week.


Other Potential Plays (Spreads, Covered Calls, Naked Puts)


These are not official plays but a good place to start if you are looking for something else to trade.

October expiration is on the 19th and November is on the 16th.

Earnings dates are never guaranteed. Sometimes the dates change 2-3 times depending on various factors. In most cases the dates are provided by a third party like Zacks and they are using predictions based on the prior earnings. If a company reports on Wednesday Jan 24th then they expect them to report on a Wednesday around the 24th in April. The majority of the time they are close and once we move nearer to April, the company will announce when they are going to report and the calendar is updated. If you are in a position, you should always check at least weekly to see if an earnings date has been posted. You should always exit a short position the day before earnings.




Existing Option Writer Positions (Alpha by Symbol)

THESE ARE NOT CURRENT RECOMMENDATIONS. These are prior recommendations that are still active in the portfolio. Do NOT act on the plays described in this section. This is the archive of prior recommendations in the current portfolio.


AAP - Advance Auto Parts (Nov Put Spread 9/27)

Shares dipped on the 18th to touch $160 but were immediately bought. Prices have rebounded to $169 and are holding at recent highs.

Earnings November 21st.

Sell short Nov $155 put, currently $2.55, stop loss $165.50.
Buy long Nov $145 put, currently $1.15, no stop loss.
Net credit $1.30.

Update 10/4: No specific news. Shares rolled over with the market to stop us out on the short put.

Closed Nov $155 short put, entry $2.70, exit $3.40, -.70 loss.
Retain Nov $145 long put, entry $.80, currently $1.60.


AAPL - Apple Inc (Nov Put Spread 10/4)

Apple broke out over $230 to a new high on Wednesday. Thursday's $4 decline was only a partiao retracement of their $13 gain over the last week or so.

There is very strong support at $217 and Apple should post killer earnings on Nov 1st on strong iPhone sales. We will exit the day before earnings.

Earnings Nov 1st.

Sell short Nov $210 put, currently $2.73, stop loss $223.50.
Buy long Nov $200 put, currently $1.46, no stop loss.
Net credit $1.27.


ADBE - Adobe Systems (Oct Put Spread 9/6)

Adobe made a new high last week then declined slightly with the Nasdaq weakness. The stock had been respecting the 60-day for almost the last year until it had those two dips in July/Aug. I believe those were buying opportunities. Despite the 3% Nasdaq crash over the last week, Adobe has not declined that much and was positive on Thursday.

Earnings 9/28 so we will be out quick. Close at the open the day before earnings.

Sell short Oct $235 put, currently $2.91, stop loss $253.85.
Buy long Oct 225 put, currently $1.78, no stop loss.
Net credit $1.13.

Update 9/13: There was a mixup on the earnings date on Adobe when I recommended the position. The source I was using for dates was showing Sept 28th. The actual date was the 13th. I reported the mixup in the Option Investor commentary and Adobe was listed in all the market wraps as 9/13. We always close the morning before an earnings event. If you did see the notices and closed on the 12th, your exit would have been $1.54. If you held over the earnings on Thursday the put was $1.46 at the close and Adobe shares were volatile after the report but ended the afterhours session with only a $2 decline. You should be able to exit at the open for a reasonable amount as long as ADBE does not gap down significantly. We still have a long put in that spread so a decline now would be appreciated.

Closed Oct $235 short put, entry $3.10, exit $1.54, +1.56 gain.
Retain Oct $225 long put, entry 1.88, currently .91, stop loss $270.65.

Update 9/20: We were stopped on the long put when ADBE gapped open after earnings. We were up at the close but the gap higher killed it

Closed Oct $225 long put, entry $1.88, exit .44, -1.44 loss.
Previously closed Oct $235 short put, entry $3.10, exit $1.54, +$1.56 gain.


ANET - Arista Networks (Oct Short Put 8/23)

Arista has caught fire and after a series of higher lows has finally broken out to a higher high. This stock appears poised for take off.

Earnings Nov 6th.

Sell short Oct $250 put, currently $3.00, stop loss $269.25.

Update 9/6: We entered this short $250 put when ANET was at $300. That was not far enough away to avoid a loss when the stock crashed $18 on Wednesday. What goes up, sometimes comes down in a hurry.

Part of our problem was the entry. The stock gapped open $14 on the day we entered the position and we had a terrible fill at 95 cents when it was $3.00 when the play was recommended the night before. That removed our margin of error on the premium.

Closed Oct $250 short put, entry .95, exit $2.40, -1.45 loss.


CLVS - Clovis Oncology Inc (Covered Call 8/23)

I finally found a stock I am willing to use for a covered call. The high premium will give us a significant amount of protection if the stock suddenly declines. Support at $35 has been rock solid and shares are trying to rally.

Earnings Nov 6th.

Buy Clovis shares, currently $35.95, stop loss $33.50.
Sell short Oct $35 call, currently $4.20, stop loss $33.50.
Net debit $31.75.

Update 9/13: Clovis declined on Tuesday on no specific news. Shares broke support to stop us out of the call position.

Closed CLVS shares, entry $35.91, exit $33.50, -2.41 loss.
Closed Oct $35 short call, entry $4.55, exit $2.10, +2.45 gain.
Net gain 4 cents. That is miniscule but far better than a loss.


COST - Costco (Oct Put Spread 8/30)

Costco is holding at recent highs and the strong consumer is pouring money into Costco coffers. With monthly sales growth at double digits there is no fear of Amazon in these isles. Every time I have been recently there is a line to get in, a line to get out and lines at all the sample carts.If the market is going to continue higher, Costco should go along for the ride.

Earnings October 4th.

Sell short Oct $220 put, currently $2.21, stop loss $227.85
Buy long Oct $210 put, currently $1.00, no stop loss.

Update 9/20: We were stopped on the October put spread. I am recommending we close the long put because I seriously doubt COST is moving much lower.

Closed Oct $220 short put, entry $2.29, exit $1.00, +1.29 gain.
Close Oct $210 put, entry .99, currently .55, -.35 loss.

Update 9/27: We were stopped on the October put spread the prior week. I recommended we close the long put because I seriously doubt COST is moving much lower.

Closed Oct $220 short put, entry $2.29, exit $1.00, +1.29 gain.
Closed Oct $210 put, entry .99, exit .49, -.50 loss.


FB - Facebook (Oct Put Spread 8/30)

Facebook erased months of gains with their earnings guidance to fall to $170. Since then they have tried to rebound twice, so far unsuccessfully. However that $170 support level is holding. With the S&P 3,000 tractor beam pulling the markets higher we should see FB begin to rally again soon.

Earnings October 16th.

Sell short Oct $165 put, currently $1.85, stop loss $171.85.
Buy long Oct $155 put, currently $.72, no stop loss.

Update 9/6: Facebook has crashed $16 over the last three days on worries about decelerating growth and increasing regulatory oversight. The testimony in Washington on Wednesday was almost pleading for help in controlling fake accounts. There is also a probe into the suppression of conservative content. We lost a little bit on the short put but the long put is up nicely. I added a stop loss to the long put.

Closed Oct $165 short put, entry $1.95, exit $2.50, -.55 loss.
Retain Oct $155 long put, entry .83, currently $3.35, stop loss $163.50.

Update 9/13: We had a put spread on Facebook and the short side was stopped out the prior week on the big decline. The long put was inflated and I added a profit stop at $163.50. That was hit on Friday morning when the FANG stocks rallied.

Closed Oct $155 long put, entry .82, exit $3.25, +$2.43 gain.


FB - Facebook (Nov Put Spread 9/20)

Facebook shares have been depressed for two weeks but the last two days the stock has begun to rebound. Even if it does not move up from here, it has held support for the last two weeks.

Earnings Oct 16th.

Sell short Nov $160 put, currently $2.62, stop loss $159.00.
Buy long Nov $150 put, currently $1.17, no stop loss.
Net credit $1.45.

Update 10/4: The report of a new hack into 50 million Facebook accounts caused the shares to collapsed again and make a new five-month low. We were stopped on the short put and the long put is still active and profitable.

Closed Nov $160 short put, entry $5.50, exit $6.45, -.95 loss.
Retain Nov $150 long put, entry $2.41, currently $4.55, stop loss $160.50.


FB - Facebook (Nov Put Spread 10/4)

Facebook shares fell hard again on news of the new cyberattack. However, Facebook always seems to bounce back from these types of revelations. We are going to sell a put spread nearly $20 OTM and the stock is trying to cling to the $160 level.

Sell short Nov $140 put, currently $1.94, stop loss $154.50.
Buy long Nov $130 put, currently .83, no stop loss.
Net credit $1.11.


FFIV - F5 Networks (Oct Put Spread 9/13)

Shares of F5 are making new highs and the recent Nasdaq volatility barely shows on this chart. This is great relative strength and should continue higher.

Earnings Oct 25th.

>b>Sell short Oct $180 put, currently $1.44, stop loss $188.85.
Buy long Oct $170 put, currently .69, no stop loss.
Net credit 75 cents.

Update: 10/4: F5 shares collapsed with the Nasdaq over the last four days after making a new high on Friday. There has been absolutely no news. We were stopped out of the short put and the long put is still active.

Closed Oct $180 short put, entry 1.36, exit 1.05, +.31 gain.
Retain Oct $170 long put, entry .54, currently .77.


LULU - Lululemon (Nov Call Spread 10/4)

Shares peaked at $164 the prior week and have declined to $157 on the market weakness. LULU has a nice base built and could go higher but the strong gains since last December suggests there may be more sellers than buyers in the weeks ahead.

Earnings Nov 20th.

Sell short Nov $170 call, currently $2.00. Stop loss $163.25.
Buy long Nov $180 call, currently .79, no stop loss.


MED - Medifast (Nov Short Put 9/27)

Medifast was knocked for huge loss from $260 to $181 last week on no specific news. Shares had simply gotten ahead of themselved and profit taking appeared. After the instant rebound they have held over $210 and are faithfully following the 50-day average higher. We are going to sell a put $40 out of the money.

Earnings November 1st.

Sell short Nov $180 put, currently $4.80, stop loss $207.25.


NVDA - Nvidia (Oct Short Put 8/23)

Nvidia disappointed some analysts with their earnings but announced a new video chip that is 600% faster than current chips. This will more than power earnings in Q3/Q4. The dip was immediately bought and we are not likely to retest that $240 level in the near future.

Earnings Nov-6th.

Sell short Oct $240 put, currently $2.82, stop loss $254.85.

Update 9/13: Nvidia crashed with the 50-point Nasdaq drop at the open on Friday to stop us out on the short put for a minor loss. The entire chip sector was crushed.

Closed Oct $240 short put, entry $2.65, exit $3.20, -.55 loss.


NVDA - Nvidia (Nov Short Put 10/4)

Shares got a bump this week after Evercore ISI upgraded their target price to $400. Shares spiked to a new high before fading slightly in the Nasdaq decline. I firmly believe we will see $400 next year but that does not mean there is no risk at $250. This strike is $30 OTM but Nvidia can move quickly. I am counting on the Nasdaq coming back to life soon.

Earnings Nov 15th.

Sell short Nov $250 Put, currently $4.40, stop loss $264.85.


PAYC - Paycom Software (Oct Put Spread 9/13)

Paycom is on fire. Shares have gained $61 since the beginning of August. The rally is highly suspect at this point and the doubt is keeoing the put premiums high.

Earnings Oct 25th.

Sell short Oct $145 put, currently $1.65, stop loss $154.
Buy long Oct $135 put, currently .80, no stop loss.
Net credit 85 cents.

Update 9/20: Paycom self destructed after a two month rise. Shares declined from $164 to $151 in 4 days. We were stopped at $154 and in hindsight the stop was not tight enough.

Closed Oct $45 short put, entry $1.63, exit $2.60, -.97 loss.
Retain Oct $135 long put, entry .70, currently .75.

Update 9/27: We were stopped on the short put the prior week and the rebound stopped us out of the long put last week.

Closed Oct $135 long put, entry .70, exit .15, -.55 loss.
Previously closed Oct $145 short put, entry $1.63, exit $2.60, -.97 loss.


PVH - PVH Corp (Nov Put Spread 9/27)

PVH shares were hammered after earnings to bottom at$131.60. Shares are rebounding after two weeks of consolidation.

Earnings Nov 23rd.

Sell short Nov $135 put, currently $1.70, stop loss $139.85.
Buy long Nov $125 put, currently .60, no stop loss.
Net credit $1.10.

Update 10/4: No specific news. Shares rolled over with the market to stop us out on the short put. Two weeks of gains evaporated in three days.

Closed Nov $155 short put, entry $2.70, exit $3.40, -.70 loss.
Retain Nov $145 long put, entry $.80, currently $1.60.


RH - RH Inc (Oct Short Put 9/13)

Formerly Restoration Hardware, RH shares fell nearly $40 after earnings. Over the last two days they have rebounded sharply after the CEO bought $1 million in shares in the open market. Last week the company opened its largest store, a 95,000 sqft giant in New York City. It cost the company $50 million but the CEO believes it will produce $100 million a year in revenue.

Earnings Dec 4th.

Sell short Oct $120 put, currently $2.30, stop loss $127.65.

Update 9/27: RH dipped just enough on the market decline on Monday to stop us out of the short put position.

Closed Oct $120 short put, entry $2.33, exit $1.95, +.38 gain.


ROKU - (Nov Short Put 9/20)

Roku closed at a new high on Thursday and after the week of consolidation it may be ready to run again.

Sell short Nov $60 put, currently $2.20, stop loss $68.50.

Update 10/4: Roku declined $11 in three days after making a new high on Monday. There was no news. We were stopped on Wednesday for a breakeven.

Closed Nov $60 short put, entry $2.17, exit $2.11, +0.06 gain.


SHOP - Shopify (Oct Short Put 8/30)

Shopify disappointed on earnings and crashed back to $132 twice and both times that held. The last rebound faded slightly the last two days because SHOP is market sensitive. However, the Nasdaq decline on Thursday barely made a dent in Shopify gains.

Earnings October 25th.

Sell short Oct $125 put, currently $2.10, stop loss $137.00.

Update 9/6: The decline in the Nasdaq and the drop in the Chinese retail stocks knocked $12 off SHOP in just the last two days. When shares are falling hard, premiums rocket higher and we barely got out with just a minor loss.

Closed Oct $125 short put, entry $2.25, exit $3.20, -.95 loss.


SHOP - Shopify (Oct Call Spread 9/6)

Shopify failed with a lower high and is in danger of breaking through support at $134. With the commentary negative the odds are better that support breaks rather than produces a rebound.

Earnings Nov 6th.

Sell short Oct $150 call, currently $2.70, stop loss $140.85.
Buy long Oct $160 call, currently $1.35, no stop loss.
Net credit $1.35.

Update 9/13: Shopify gapped lower at the open on Friday and then rocketed $25 higher over the next week. The rebound stopped us out on the short call for a loss but the long call has become very profitable. I added a stop loss to the long call.

Closed Oct $150 short call, entry $2.10, exit $4.60, -2.50 loss.
Retain Oct $160 long call, entry $1.70, currently $6.40, stop loss $153.25.

Update 9/27: We were stopped on the short call the prior week and the long call was highly profitable. I put a stop loss on that call and that was hit last Friday.

Closed Oct $160 long call, entry $1.70, exit $9.10, +$7.40 gain.
Previously closed Oct $150 short call, entry $2.10, exit $4.60, -2.50 loss.


STZ - Constellation Brands (Oct Short Put 8/23)

Constellation crashed on the announcement they bought a major stake in Canopy Growth, a marijuana grow company. Shares briefly fell to just below $200 before starting to rebound. That should be strong support.

Earnings Sept 28th.

Sell short Oct $190 put, currently $2.20, stop loss $198.25.

Update 9/20: Marijuana stocks have been trading like bitcoin over the last week. Constellation saw huge swings as stocks like Tilray (TLRY) surged more than 100% intraday on extreme volatility. This caused us to be stopped out when Constellation was caught in the downdraft.

Closed Oct $190 short put, entry $2.25, exit .76, +$1.49 gain.


TSLA - Tesla Inc (Nov Short Put 9/27)

If you feel like living dangerously and taking a walk on the wild side, short puts on Tesla on Friday morning. The SEC sued Elon Musk about his going private tweet. Shares fell $37 in afterhours to close at $270. The Nov $200 put is quoted at $3.90 at the close. After the post close news you can bet the stock will crash at the open however, now that the bad news is in the market, it may not decline the entire $37. Either way the put is going to spike in value because investors do not know where the decline will stop. I suggest if it declines to $250 that would be a hard floor. Any opening print put premium is likely to be enormously high and eill evaporate quickly once the stock finds a bottom.

HIGH RISK

Sell short Nov $200 put, currently $3.90, stop loss $247.50.


TTD - The Trade Desk (Oct Call Spread 9/6)

The Trade Desk has been on fire for most of 2018 and has risen from $40 back in February. This is an advertising company competing with Facebook, Google and Amazon among others. The easy revenue gains have already been made. Shares have stalled at $140 for more than a week. With other momentum stocks rapidly losing ground, it may keep TTD from advancing. Adding another $20 at this point would be amazing relative strength.

Earnings November 8th.

Sell short Oct $160 call, currently $2.20, stop loss $145.
Buy long Oct $170 call, currently $1.20, no stop loss.
Net credit $1.00.

Update 9/13: The Trade Desk gapped down on Friday then rebounded $10 on no news. This was part of the market rebound on Friday. We were stopped out on the rebound and our long call is up sharply. I am recommending we close the October $170 call because I do not see the stock moving that much higher and today's decline in a positive market is not a good sign.

Closed Oct $160 short call, entry $2.65, exit $3.70, -1.05 loss.
Close Oct $170 long call, entry $1.60, currently $2.50, potential +.90 gain.

Update 9/20: We were stopped the prior week on the short call and we exited the long call at the open on Friday.

Closed Oct $170 long call, entry $1.60, exit $1.65, +.05 gain.
Previously closed Oct $160 short call, entry $2.65, exit $3.70, -1.05 loss.


TWLO - Twilio Inc (Oct Put Spread 8/23)

TWLO closed at a new high on Thrusday after spiking more than $10 after earnings two weeks earlier. The post earnings depression was minimal and TWLO could ne off to the races.

Earnings Nov 6th.

Sell short Oct $70 put, currently $2.19, stop loss $74.65.
Buy long Oct $60 put, currently .70, no stop loss.
Net credit $1.49

Update 9/20: Twilio shares rolled over after closing at a ne whigh last Friday. The $6 drop stopped us out of the short put.

Closed Oct $70 short put, entry $1.67, exit .76, +.91 gain.
Retain Oct $60 long put, entry .77, currently .10.


Margin Requirements:

There are several different formulas for determining margin requirements for naked put writing. These are normally broker specific and some can require larger margin requirements than others.

Here is the most common margin calculation for naked puts.

100% of the option premium + ((20% of the Underlying Market Value) - (OTM Value))

For simplicity of calculation simply use 20% of the underlying stock price and you will always be safe. ($25 stock * 20% = $5 margin)


Prices Quoted in Newsletter

At Option Investor we have a long-standing policy prohibiting the editors and staff from actually trading the individual recommendations in order to conform to SEC rules concerning trades.

The prices quoted in the newsletter are the end of day prices in most cases.

When discussing fills or stops the prices quoted are the bid/ask at the time the entry trigger or exit stop is hit. This is NOT a price that someone on staff actually got using a live order.

For entry/exit points at the market open the prices quoted will be the opening print. The majority of the time the readers are able to get a better fill than the opening print because of market maker bias at the open.

For trades with an opening qualification the prices quoted will be the bid/ask at the time the qualification was met.

All of these rules normally produce worse prices than an active trader would normally get. Because they are standardized there may be some cases where a price quoted was better than an actual fill. If you received a price that was dramatically different than what was quoted please let us know.