DailyPlay – Closing Trades – July 15, 2022

Closing Trades

• V: 8.32% Loss: Sell to Close 2 Contracts July 15, 2022 $210/$190 Put Verticals @ $4.41 Credit. DailyPlay Portfolio: By closing the remaining 2 of the 4 Contracts, we will be receiving $882. We took partial profits for this trade on June 21 at a $13.42 Credit Therefore, the average gain on this trade was 85.34 % and the average cost basis to exit this trade is $8.92 Credit.
• BIIB: 70.30% Loss: Sell to Close 3 Contracts July 15, 2022 $215/$225 CallVerticals @ $0.98 Credit. DailyPlay Portfolio: By closing the remaining 3 of the 6 Contracts, we will be receiving $294. We took partial profits for this trade on July 12 at a $2.80 Credit. Therefore, the average loss on this trade was 42.73% and the average cost basis to exit this trade is $1.89 Credit.

Investment Rationale

Going into today, the weekly SPX’s Lagging Line is right by its associated cloud bottom.  It’s why, in my eyes, yesterday saw a fairly dramatic rally from what were the intraday lows.  Bulls are trying to defend this line, for those of them who know this indicator also know that a real breach of that cloud bottom could quickly start another leg lower. 

As such, I am not going to try to guess which way the market is going to trade today, but I do very much suspect that within a few days to a week or two, we will know which way the overall market is likely to trade through Labor Day.

SPX – Weekly

We have two open option spread positions that expire today that we need action on.  First, there’s a long Visa (V) $210/$190 put spread that had the stock close at $205.91 on Thursday.  You want to exit that trade today unless you plan on exercising your option to short the stock at $210.

Secondly, we are long a BIIB $215/$225 call spread.  The stock closed yesterday at $214.27.  This could trade either way today, but if you are sure that you want to avoid exercising the $215 strike if it closes above there today, you’ll also want to exit this before today’s close.

We also have on two other long call spreads that will go out worthless today (META and GLD) that we need do nothing with but lick our wounds.

Lastly, our short July 29th ACN $280/$270 put spread is now down over 50%.  Those of you who typically exit half the trade when that occurs could do so today. (Personally, I’d prefer to see where the SPX closed today, because if its weekly cloud model holds as explained above, next week could be a decent up move, putting this spread back in contention.)  It’s completely up to you.