DailyPlay – Opening Trade (DHI) Closing Trade (LIN) – July 2, 2024

Closing Trade

• LIN – 58.82% gain: Buy to Close 2 Contracts (or 100% of your Contracts) July 19th $435/$450 Call Vertical Spreads @ $2.80 Debit. DailyPlay Portfolio: By Closing both Contracts, we will pay $560. We opened these 2 Contracts on June 14 @ $6.80 Credit. The gain, therefore, is $800. This translates to a gain of 0.8% on our Portfolio.

Additional DHI Bearish Opening Trade Signal

Investment Rationale

As home builders continue to underperform, home builders such as D.R. Horton continue to be under pressure and DHI just broke below the key $140 support level that we were expecting. We are going to take this opportunity to add another 2% of our portfolio’s exposure to this position as we target $125 to the downside. Additionally, LIN reached out $425 target price intraday yesterday and has triggered our take profit level, so we are going to take this opportunity to close that out for a profit. 

We are adding another 2% exposure to the DHI trade and therefore opening 5 more Contracts using the same strike prices and expiry date as on June 25.

DHI – Daily

Trade Details

Strategy Details

Strategy: Long Put Vertical Spread

Direction: Bearish Debit Spread

Details: Buy to Open 5 Contracts August 16th $140/$130 Put Vertical Spreads @ $4.30 Debit per Contract.

Total Risk: This trade has a max risk of $2,150 (5 Contracts x $430) based on a hypothetical $100,000 portfolio risking 2%. We suggest using 2% of your portfolio value and divide it by $430 to select the # contracts for your portfolio.

Trend Continuation Signal: This is a bearish trade on a stock that broke below an area of support.

1M/6M Trends: Bearish/Bearish

Relative Strength: 3/10

OptionsPlay Score: 112

Stop Loss: @ $2.15 Credit. (50% loss of premium)

View DHI Trade

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