DailyPlay – Opening Trade (JETS) – August 28, 2023

JETS Bullish Opening Trade Signal

View JETS Trade

Strategy Details

Strategy: Long Call

Direction: Bullish

Details: Buy to Open 26 Contracts Oct 20th $19 Calls @ $0.78 Debit per contract.

Total Risk: This trade has a max risk of $2,028 (26 Contracts x $78) based on a hypothetical $100,000 portfolio risking 2%. We suggest using 2% of your portfolio value and divide it by $78 to select the # shares for your portfolio.

Counter Trend Signal: This stock is bearish but is expected to bounce higher off support.

1M/6M Trends: Bearish/Bearish

Technical Score: 4/10

OptionsPlay Score: 87

Stop Loss: @ $0.35 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

Despite reporting record profits across the airline industry, the JETS ETF has pulled back 16% over the past month and a half on the back of contagion out of China. However, travel demand and revenue numbers in the airlines do not reflect the steep declines. I think this is an opportunity to play for a bounce with an attractive risk/reward for long exposure. With options relatively inexpensive, I’m going to use a simple call option to play for upside. Buy Oct $19 Calls @ $0.78 Debit. With a hypothetical portfolio of $100,000, I recommend risking 2% of the portfolio’s value on this trade, which is 26 Contracts for a risk of $2,028. We will set our stop loss on the entire position to 50% of the premium paid of $0.35 Credit. 

JETS – Daily