DailyPlay – Opening Trade (TAN) – July 5, 2022

Bullish Opening Trade Signal

View TAN Trade

Strategy Details

Strategy: Short Put Vertical Spread

Direction: Bullish

Details: Sell to Open 3 Contracts Aug 5, 2022 $70.50/$61 Put Verticals @ $2.77 Credit.

Total Risk: This trade has a max risk of $2,019 (3 Contracts x $673 per contract).

Trend Continuation Signal: This is a Bullish trade on an ETF that is experiencing a sideways to a bullish trend.

1M/6M Trends: Neutral/Mildly Bullish

Technical Score: 8/10

OptionsPlay Score: 85

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. 

Please note these prices are based on the previous day’s closing prices. Should the underlying move significantly during the pre-market hours, we will likely adjust the strikes and prices to reflect a more accurate trade entry. This will be reflected in the Portfolio tab within the OptionsPlay platform.

Investment Rationale

We witnessed a double-bottom formation on TAN around the $57 area, which is 55% of its peak its previous highs. What this could indicate is that the decline in energy stocks is coming to an end and that an opportunity is arising. As TAN has shown some break-outs to the upside from this level, we could expect a continuation of this pattern and continued bullish momentum. With Implied Volatility being relatively high, we will be taking advantage of this EFT by placing a bullish credit spread trade.