DailyPlay – Opening Trade (BROS) Closing Trade (LYFT) Partial Closing Trades (AKAM, BSX) – March 29, 2023

Closing Trade

• LYFT – 19.40% Gain: Buy to Close 1 Contract (or 100% of your remaining Contracts) April 14th $9 Put @ $0.54 Debit. DailyPlay Portfolio: By Closing the remaining 1 Contract, we will be paying $54. We partially closed this trade on March 24 @ $0.30 Debit when we closed 50% of the contracts. Our average cost basis for exiting the trade is, therefore $42 and our average gain on this trade is 37.31%.

Partial Closing Trades

• AKAM – 1.47% Loss: Sell to Close 2 Contracts (or 50% of your Contracts) April 21st $75/$82.50 Call Vertical Spreads @ $2.68 Credit. DailyPlay Portfolio: By Closing 2 of the 4 Contracts, we will receive $536.
• BSX – 2.03% Loss: Sell to Close 4 Contracts (or 1/3 of your Contracts) April 21st $48 Calls @ $1.45 Credit. DailyPlay Portfolio: By Closing 4 of the 12 Contracts, we will receive $580.

BROS Bullish Opening Trade Signal

View BROS Trade

Strategy Details

Strategy: Short Put Vertical Spread

Direction: Bullish

Details: Sell to Open 16 Contracts April 28th $30/$28 Put Vertical Spreads @ $0.83 Credit per contract.

Total Risk: This trade has a max risk of $1,888 (16 Contracts x $118) based on a hypothetical $100,000 portfolio risking 2%. We suggest using 2% of your portfolio value and divide it by $118 to select the # contracts for your portfolio.

Counter Trend Signal: This stock has been trading lower but is expected to bounce higher off support at the bottom of its trading range.

1M/6M Trends: Bearish/Bearish

Technical Score: 3/10

OptionsPlay Score: 92

Entering the Trade

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

Please note that these prices are based on Tuesday’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. 

Investment Rationale

A small downward session for the SPX and Dow on Tuesday, though again, the tech laden NDX was off 3x what the SPX was. The confirmed bulls and bears are still boxing it out with each other, but there’s not yet a winner. I’ll continue to play the index trading ranges until I see something different occur.

Portfolio-wise, I see that LYFT sold off sharply this week, and although we had already bought back one of two short $9 puts for a nice profit, let’s exit the other one (+19%) before it goes against us. (The stock closed at $8.87 yesterday.)  I might very well get back into selling puts next week, potentially at a lower price and strike.

LYFT – Weekly

With our long AKAM April 21st $75/$82.5 call spread, we are basically even on the trade, with the stock up a bit from where we got in, but time having passed has cost us theta erosion. The stock has a daily Setup +9 count, but at the same time, a higher open today that also intraday takes out yesterday’s high and also closes up on the day produces a new bullish Propulsion Momentum signal – with a $80.55 target. Therefore, we will reduce our position down to only two call spreads IF A) the stock doesn’t open higher today, or B) if it does open higher but is down on the day going into the close. In either of those two cases, we will exit two call spreads today.

AKAM – Daily

We are also long 12 BSX April 21st $48 calls at a cost of $1.48. They are now worth $1.45 based upon last night’s closing mid price. Though we have 24 days to go, with yesterday again topping at the same price it did 5-7 days ago, let’s take off four of 12 spreads today (simply to reduce risk).

BSX – Daily

For a new idea, join me in looking at the daily chart of the coffee retail chain, Dutch Bros. Inc. (BROS). The stock has been sideways for six months, and it’s near the bottom of the range and just posted a daily Setup -9 count.  As such, let’s look to sell a April 28th $30/$28 put spread. Last night, that closed at $0.83, or 41% of the strike differential. Earnings aren’t till May 10th, so there should be enough time for this to meander higher in the next month before they come into play.

BROS – Daily