DailyPlay – Opening Trade (UPS) Closing Trades (UPS, BDX) – September 6, 2023

Closing Trades

• UPS – 69.39% Gain: Buy to Close 7 Contracts (or 100% of your Contracts) Oct 20th $175/$180 Call  Vertical Spreads @ $0.60 Debit. DailyPlay Portfolio: By Closing all 7 Contracts, we will be paying $420. We initially opened this trade @ $1.96 Credit per contract. Our average gain, therefore, is $136per contract. 
• BDX – 50.51% Loss: Sell to Close 2 Contracts (or 100% of your Contracts) Dec 15th $285/$310 Call Vertical Spreads @ $4.38 Credit. DailyPlay Portfolio: By Closing all 2 Contracts, we will receive $876. We initially opened this trade @ $8.85 Debit per contract. Our average loss, therefore, is $447per contract. 

UPS Bearish Opening Trade Signal

View UPS Trade

Strategy Details

Strategy: Short Call Vertical Spread

Direction: Bearish

Details: Sell to Open 3 Contracts Oct 20th $165/$175 Call Vertical Spreads @ $3.64 Credit per contract.

Total Risk: This trade has a max risk of $1,908 (3 Contracts x $636) based on a hypothetical $100,000 portfolio risking 2%. We suggest using 2% of your portfolio value and divide it by $636 to select the # shares for your portfolio.

Trend Continuation Signal: This stock is bearish and expected to break to lower levels.

1M/6M Trends: Bearish/Bearish

Technical Score: 3/10

OptionsPlay Score: 101

Stop Loss: @ $7.25 Debit (100% 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 Monday’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

With the S&P 500 failing at a key resistance level this week at $4550, there are growing risks that we will revisit $4340 support levels as September is seasonally a weak month. Reviewing our open positions there are a few that require managing. Firstly we should cut losses on BDX, which simply has not propelled to new all-time highs with time decay working against us. It’s reached a 50% loss and requires closing. JETS is also on watch for closing but not yet at the 50% mark so we will keep a close eye on that position. The only other position that is near stop loss that I’m choosing not to close at the moment is NFLX. It has recently set up what looks like a head & shoulders top and I’m looking for that to potentially confirm over the next few trading sessions.

UPS on the other hand has reached a take profit level and broken below a major support of $165. It is now time to roll this position by taking profits on our Oct $175/$185 Call Vertical @ $0.60 Debit and sell an Oct $165/$175 Call Vertical @ $3.64 Credit. With a hypothetical portfolio of $100,000, I recommend risking 2% of the portfolio’s value on this trade, which is 3 Contracts for a risk of $1,908. We will set a stop loss on the spread at 100% of the premium collected @ $7.25 Debit.

UPS – Daily