DailyPlay – Opening Trade (EEM) – August 7, 2023

EEM Bullish Opening Trade Signal

View EEM Trade

Strategy Details

Strategy: Long Call

Direction: Bullish

Details: Buy to Open 12 Contracts Nov 17th $41 Calls @ $1.68 Debit per contract.

Total Risk: This trade has a max risk of $2,028 (12 Contracts x $169) based on a hypothetical $100,000 portfolio risking 2%. We suggest using 2% of your portfolio value and divide it by $169 to select the # shares for your portfolio.

Trend Continuation Signal: This stock has been neutral to bearish and is expected to break downwards. 

1M/6M Trends: Neutral/Bullish

Technical Score: 6/10

OptionsPlay Score: 81

Stop Loss: @ $0.84 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 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

Read this week’s Macro Weekly Research to start your trading week. 

With the biggest week of earnings season behind us, we’ve closed many of our earnings plays and currently have only a few open positions. As we start to wrap up earnings season I’d like to add some longer-term exposure in our portfolio based on emerging trends in the market. One that recently caught my eye is Emerging Markets. Emerging Markets is one of the “risk-on” area that could benefit from an improving global economic outlook. EEM recently broke out from a 2 year bearish trendline and presents a strong bullish risk/reward. I’m looking out to Nov and purchasing the $41 Calls @ $1.69 Debit. With a hypothetical portfolio of $100,000 we recommend risking 2% of it on this trade, which is 12 Contracts for a total risk of $2,028. Set a stop loss on the call when losses exceed 50% of the premium paid, at about $0.85 Credit.

EEM – Daily