DailyPlay – Opening Trade (AXP) Closing Trade (NEM) – July 13, 2023

Closing Trade

NEM – 102.53% Loss: Buy to Close 12 Contracts (or 100% of your Contracts) Aug 18th $42.50/$45 Calls @ $1.60 Debit. DailyPlay Portfolio: By Closing all 12 Contracts, we will be paying $1,920. We opened this trade @ $0.79 Credit and, resulting in an average Credit of $79 per contract. The average loss per contract is therefore $81.

AXP Bullish Opening Trade Signal

View AXP Trade

Strategy Details

Strategy: Long Call Vertical Spread

Direction: Bullish

Details: Buy to Open 3 Contracts Aug 18th $170/$185 Call Vertical Spreads @ $6.87 Debit per contract.

Total Risk: This trade has a max risk of $2,061 (3 Contracts x $687) based on a hypothetical $100,000 portfolio risking 2%. We suggest using 2% of your portfolio value and divide it by $687 to select the # shares for your portfolio.

Trend Continuation Signal: This stock is in a bullish trend and further upside is expected.

1M/6M Trends: Bullish/Bullish

Technical Score: 8/10

OptionsPlay Score: 92

Stop Loss: @ $3.44 Credit (50% loss).

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

Earnings seasons kick off with a bang as Delta and Pepsi beat earnings and announce upbeat guidance for 2023. Equity markets continue to trade higher in pre-markets and seems to have confirmed a break of recent double-top formation which is a very bullish signal. With this in mind, we are adjusting two of our open positions. We are going to add additional exposure to AXP and close out our NEM position. With the AXP position now up 20%, we take this opportunity to add further exposure going into its earnings next week. Buy to Open 3 Contracts (2% of our $100,000 portfolio) of the Aug $170/185 Call Vertical @ $6.87. We also need to cut losses when trades are not panning out, with NEM reaching our stop loss level of 100% of the max gain, so we are closing out the full position. 

As a reminder, our DailyPlay mandate is focused on helping you become a profitable trader. The only path to profitability is have your winners outweigh your losers. We show you how to achieve this by turning small winners into large winners while cutting losses quickly. Join me later today for our July Summit where I teach the skills to Grow Your Trading Account and how the DailyPlay provides daily examples of how to achieve this.