DailyPlay – Opening Trade (AAPL) Closing Trades (GOOGL, AMD) – October 26, 2023

Closing Trade

• GOOGL – 75% Loss: Buy to Close 4 Contracts (or 100% of your Contracts) Dec 1st $136/$128 Put Vertical Spreads @ $5.67 Debit. DailyPlay  Portfolio: By Closing all 4 Contracts, we will be paying $2,268. We initially opened these 4 Contracts on Oct 24 @ $3.24 Credit. Our average loss, therefore, is $243 per contract. 
• AMD – 75.46% Loss: Buy to Close 3 Contracts (or 100% of your Contracts) Nov 24th $108/$98 Put Vertical Spreads @ $6.72 Debit. DailyPlay  Portfolio: By Closing all 3 Contracts, we will be paying $2,016. We initially opened these 3 Contracts on Oct 12 @ $3.83 Credit. Our average loss, therefore, is $289 per contract. 

AAPL Bearish Opening Trade Signal

View AAPL Trade

Strategy Details

Strategy: Long Put Vertical Spread

Direction: Bearish

Details: Buy to Open 5 Contracts Dec 15th $170/$155 Put Vertical Spreads @ $4.00 Debit per contract.

Total Risk: This trade has a max risk of $2,000 (5 Contracts x $400) based on a hypothetical $100,000 portfolio risking 2%. We suggest using 2% of your portfolio value and divide it by $400 to select the # contracts for your portfolio.

Trend Continuation Signal: This is a bearish trade on a stock that is in a bearish

1M/6M Trends: Bearish/Mildly Bearish

Relative Strength: 8/10

OptionsPlay Score: 147

Stop Loss: @ $2.00 Credit. (50% loss of premium paid)

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 season can be a challenging time to navigate, especially, when the market reacts differently to the underlying report. Despite GOOGL, META, SNAP reporting significantly stronger than expected numbers, these stock have sold off heavily. This confirms the break of the key $4220 support level on the S&P 500 and $14,500 on the Nasdaq-100. We, unfortunately, have to face two losing positions in our portfolio on GOOGL and AMD and close out the full positions before they reach their max loss. Additionally, looking at opportunities our AAPL position has started to work in our favor with the stock at risk of breaking below its key $170 support. I believe now is an opportunity to add some additional exposure to potentially play for a continuation lower. I suggest buying another 5 contracts of the Dec $170/$155 Put Vertical @ $4.00 Debit, which represents another 2% of our hypothetical $100,000 portfolio. We will move our stop loss on the put spread to around 50% of the premium paid @ $2.00 Credit.

AAPL – Daily