"This was my strategy during the 411-point swing." Nate Bear, Lead Technical Tactician, Monument Traders Alliance Hey Gang, Yesterday's 411-point range on the S&P 500 confused a lot of traders. So, why did I decide to scoop up some Amazon (AMZN) call options? Because I know something that most traders don't - when to take profits. And you're about to learn how I do it. You see, a lot of folks look at an 8.5% move in the S&P in a single day and assume they can catch a flyer that nets them 1,000%. Here's the thing… Those types of gains are just as likely now as they would be when things are calm. Why? Because option premiums are more expensive. That's why it's critical to know when to take profits like I did: So, is this trade over? No. In fact, at the time of writing this, I still hold some Amazon calls. Because now that I've locked in profits, I can keep a small amount open to try for those massive winners. Today, I want to lay out the trade setup for Amazon and explain how to manage it in this kind of environment. But first, let's get a sense of where things stand. Current Market Are we in a "dead cat bounce," or is this the reversal everyone has been waiting for? I don't believe we've hit the bottom. Tariffs, which are the key driver of the selloff, remain an open question. No one knows what the final verdict will be. Will we keep these sky-high rates or negotiate something better? I don't know. But until we do know, we can expect volatility. Right now, the VIX, the measure of volatility on the S&P 500, is at its highest levels since the Covid crash. So, it's fair to say that we're heavily oversold at the moment. That doesn't mean we'll get a multi-day relief rally or that any of them will stick. But we need to manage our positions in a way that maximizes our gains and minimizes risks. And there's no better example of that than my latest Amazon trade. Amazon's Risk Management Let's start with the chart of the TPS setup that I was looking at for this trade: This is the 15-minute chart for Amazon. Now, you're probably looking at this thinking, "What the heck is going on here?" Allow me to explain. When stocks bottom out, they'll often pop and then consolidate. From there, they either make the next move higher or drop back down. That's why options are key to my strategy. They limit my downside risk but give me plenty of upside potential. My goal is to take profits into the first decent move higher I see and then leave a small portion open to try and see if I can catch a runner. The key is to make sure that you lock in enough profits so that even if your runner fails, you still walk away with money in your wallet. Oftentimes, that means cutting the runner loose if it drops back to breakeven, though in some cases, you can let the runner go until expiration. It all depends on how much you're able to lock in. For example. Let's say I have ten of those Amazon calls I bought for $2.30, or $2,300 in total. I sell five of those for 100% profit. That means if the other five go to zero, I walk away at breakeven. So, in this case, I'd set a stop at my entry for the remainder at breakeven, ensuring I lock in some profits. Otherwise, I could sell nine of the contracts at 100%. That would mean I could let the tenth contract run and either score big or go to zero. Either way, I'd walk away with profits. This is the key to thriving in these wacky markets. Today's Play in Amazon Now, there is still a setup on the 30-minute timeframe Amazon chart. We have a TPS setup with a nice upward TREND, a consolidation PATTERN, and a SQUEEZE which identifies when the Bollinger Bands are inside the Keltner Channel. This kind of setup necessitates patience. It's important to get the entry you want and not chase the trade. After yesterday's move in the S&P 500, there are a lot of charts that look like this or even better. I like Amazon because it's largely insulated from tariffs and has earnings coming up. | 
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