DailyPlay – Opening Trade (ORCL) Closing Trade (TSLA) – June 12, 2023

Closing Trade

• TSLA – 43.70% Loss: Sell to Close 2 Contracts (or 100% of your Contracts) Aug 18th $210/$170 Put Vertical Spreads @ $6.39 Credit. DailyPlay Portfolio: By Closing the 2 Contracts, we will receive $1,278. 

ORCL Bullish Opening Trade Signal

View ORCL Trade

Strategy Details

Strategy: Long Call Vertical Spread

Direction: Bullish

Details: Buy to Open 8 Contracts July 7th $111/$120 Call Vertical Spreads @ $2.70 Debit per contract.

Total Risk: This trade has a max risk of $2,160 (8 Contracts x $270) based on a hypothetical $100,000 portfolio risking 2%. We suggest using 2% of your portfolio value and divide it by $270 to select the # shares for your portfolio.

Trend Continuation Signal: This stock has in a bullish trend, which is expected to continue higher.

1M/6M Trends:Bullish/Bullish

Technical Score: 10/10

OptionsPlay Score: 116

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 Friday’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

As equity markets continue to improve with small caps and the equal-weight S&P 500 starting to play catchup, we enter a big week with a potential Fed pause on Wednesday. The S&P did print a Daily -9 Sell Signal on Thursday but the overall picture is improving in favor of the bulls. As we look towards next week, ORCL reports earnings after the closing bell today. Despite trading at 52-week highs, ORCL trades at a relative discount to its “AI peers” at only 21x forward earnings. This valuation is expected given ORCL’s modest expected EPS growth rate of only 3%, but guidance could accelerate those expectations on the back of their AI-focused deals in the past quarter. We are taking this opportunity to play for upside by buying a July 7 $111/120 Call Vertical @ $2.70 Debit. 

ORCL – Daily