DailyPlay – Opening Trade (DE) Partial Closing Trade (BIIB) – July 12, 2022

Partial Closing Trade

• BIIB: 15.15% Loss: Sell to Close 3 Contracts July 15, 2022 $215/$225 Call Verticals @ $2.80 Credit. DailyPlay Portfolio: By closing 3 of the 6 Contracts, we will be receiving $1,680.

Bearish Opening Trade Signal

View DE Trade

Strategy Details

Strategy: Short Call Vertical Spread

Direction: Bearish

Details: Sell to Open 2 Contracts Aug 12, 2022 $295/$315 Call Verticals @ $9.20 Credit..

Total Risk: This trade has a max risk of $2,160 (2 Contracts x $1,080 per contract).

Trend Continuation Signal: This is a Bearish trade on a stock that is experiencing a bearish trend.

1M/6M Trends: Bearish/Bearish

Technical Score: 4/10

OptionsPlay Score: 111

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

Stocks took it on the chin on Monday, after all, major US stock indexes again failed at their weekly Conversion Lines. It’s too soon to know that the rally has completely halted, but at least we know that the recent rallies all stalled at first level weekly resistance.

Looking at a name that has seemingly broken down (and should have a strong wall of resistance above it) is Deere & Company (DE). In the last few weeks, it has broken beneath a significant support line near $322.

With the stock reporting earnings on August 19, let’s look to short an August 12th $295/$315 call spread for what closed on Monday at $9.20 mid. This represents collecting 46% of the spread differential.

DE – Daily

Elsewhere, we hold a long BIIB July 15 $215/$225 call spread that expires on Friday with the stock trading right at $215. Let’s sell half today as we’re running out of time for this to hold its recent rally.