DailyPlay – Opening Trade (WBA) Closing Trades (AAPL, EBAY) – June 1, 2023

Closing Trades

• AAPL – 90.52% Loss: Sell to Close 2 Contracts (or 100% of your remaining Contracts) June 16th $165 Puts @ $0.51 Credit. DailyPlay Portfolio: By Closing the remaining 2 Contracts, we will receive $102. We partially closed this trade on May 22 when we closed 50% of our contracts @ $0.94 Credit. Our average cost basis to exit this trade is, therefore, $0.73 and our average loss on this trade is 86.53%.
• EBAY – 145.76% Loss: Buy to Close 8 Contracts (or 100% of your remaining Contracts) June 2nd $44/$41 Put Vertical Spreads @ $1.45 Debit. DailyPlay Portfolio: By Closing all 8 Contracts, we will be paying $1,160.

WBA Bullish Opening Trade Signal

View WBA Trade

Strategy Details

Strategy: Long Call Vertical Spread

Direction: Bullish

Details: Buy to Open 12 Contracts July 21st $30/$35Call Vertical Spreads @ $1.58 Debit per contract.

Total Risk: This trade has a max risk of $1,896 (12 Shares x $158) based on a hypothetical $100,000 portfolio risking 2%. We suggest using 2% of your portfolio value and divide it by $158 to select the # shares for your portfolio.

Counter Trend Signal: This stock has respected support and is expected to bounce higher from this point.

1M/6M Trends: Bearish/Bearish

Technical Score: 2/10

OptionsPlay Score: 93

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 Wednesday’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

The S&P 500 continues to flirt with the $4200 major resistance level. This week has been filled with positive news, debt ceiling, a possible pause to rate hikes, yet markets remain below $4200. At the moment, market breadth remains poor with AI stocks dragging it higher. For the market to break higher, the rest of the market needs to start pulling its weight. At this juncture, we are taking an opportunity to close out existing trades and waiting to see if bulls have enough control to breakout higher. Walgreens (WBA) recently made a new 52-week low with positive divergence on the Weekly Chart with a +13 setup. This sets up for a potential quick bounce higher on a counter trade and I’m looking to buy the July $30/$35 Call Vertical @ $1.58 Debit or about 5% of the stock’s value. 

WBA – Daily

We are also taking this opportunity to close out our remaining AAPL Calls and EBAY positions.