DailyPlay Opening Trade (SYY) – April 19, 2022

View SYY Trade

Strategy Details

Strategy & Direction: Short Call Spread – Bearish

Details: Sell 8 May 6 $90/$86 Call Vertical @ $1.65 Credit

Total Risk: This trade has a max risk of $1,880 (8 contracts x $235 per contract). 

Counter Trend Signal: This is a bearish strategy on a stock or ETF that is experiencing a bullish trend.

1M/6M Trends: Bullish/Bullish

Technical Score: 9/10

OptionsPlay Score: 109

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Entering the Trade

Use the following details to enter the trade on your trading platform. Please note that if there is a multi-leg option strategy, it should be entered as a single trade.

Investment Rationale

Yesterday did little to help us figure out if last Tuesday’s SPX Setup -9 count is going to lead to a rally, or not. The market can really go either way right now, and I don’t have high conviction either way, or at least, not yet. So, I am more apt to do nothing right now or play for a near-term option play with a name like Sysco Corp. (SYY) that reports quarterly earnings in just two weeks and is up against resistance and has some upside exhaustion signals that have just appeared.

The weekly chart shows a line (in green) connecting prior all-time highs coming in just above the current price.

The daily chart shows an Aggressive Sequential +13 signal from last Thursday and then a likely Setup +9 today.  Thus, this may stall here and meander into earnings on May 3. 

As such, we’ll look to sell a SYY May 6th $86/$90 call spread for $1.65, having us take in a credit that is about 41% of the spread differential based upon yesterday’s closing mid prices.  Be aware that this trade idea likely turns into an all or none type proposition, meaning we will either make the full $1.65 credit or lose the max $2.35 we can.