DailyPlay – Rolling Trade (DHI) – June 25, 2024

Closing Trade

• DHI – 72.83% loss: Sell to Close 7 Contracts (or 100% of your Contracts) July 5th $140/$130 Put Vertical Spreads @ $0.75 Credit. DailyPlay Portfolio: By Closing all 7 Contracts, we will receive $525. We opened these 7 Contracts on May 10 @ $3.22 Debit. The average loss, therefore, is $247. 

DHI Bearish Opening Trade Signal

Investment Rationale

DHI continues to trend lower in the direction of our thesis but our Debit Spreads expires in less than two weeks and is running out of time. We will believe in our overall thesis so I am advocating that we roll the July 5 $140/130 Put Vertical to an Aug 16 $140/130 Put Vertical for a Net Debit of $2.02 Debit ($2.77 – $0.75) to buy ourselves 2 more months of time for DHI to breakdown below the key $140 support. 

We Roll this trade by Closing the existing Trade and Opening a new one.

DHI – Daily

Trade Details

Strategy Details

Strategy: Long Put Vertical Spread

Direction: Bearish Debit Spread

Details: Buy to Open 8 Contracts August 16th $140/$130 Put Vertical Spreads @ $2.77 Debit per Contract.

Total Risk: This trade has a max risk of $2,216 (8 Contracts x $277) based on a hypothetical $100,000 portfolio risking 2%. We suggest using 2% of your portfolio value and divide it by $277 to select the # contracts for your portfolio.

Trend Continuation Signal: This is a bearish trade on a stock that is trending lower.

1M/6M Trends: Neutral/Mildly Bearish

Relative Strength: 4/10

OptionsPlay Score: 126

Stop Loss: @ $1.39 Credit. (50% loss of premium)

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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. 

View DHI Trade