DailyPlay – Opening Trade (XOM) – September 7, 2022

View XOM Trade

Strategy Details

Strategy: Short Call Vertical Spread

Direction: Bearish

Details: Sell to Open 6 Contracts September 23, 2022 $95/$100 Call Vertical Spreads @ $1.99 Credit.

Total Risk: This trade has a max risk of $1,806 (6 Contracts x $301).

Counter Trend Signal: This is a Bearish trade on a stock that is experiencing a bullish trend. 

1M/6M Trends: Bullish/Bullish

Technical Score: 1010

OptionsPlay Score: 103

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

After what appeared to be a day that we could have seen upward prices from how futures traded overnight, yesterday saw those gains evaporate to close lower on the day. Again, we’re getting a sense that the market can’t hold rallies, and in many ways, it’s acting the opposite of how the SPX traded in 2021, when it could barely hold losses.

With crude oil looking more and more like its weekly cloud is going to pose overhead resistance going forward, let’s look to short a XOM Sept. 23nrd $95/$100 call spread for what closed yesterday at $2.07 mid. (The higher “hedge” strike would be at a new closing high for the post-July rally.)

XOM – Daily

As a reminder, today is my last OP activity until I return from vacation on Monday, Sept. 18th. Tony will handle all the Daily Plays and webinars for me until then.