DailyPlay – Closing Trades (COST, JNJ, VIX) & Portfolio Review – November 11, 2024

Closing Trades

• COST – 100% loss: Buy to Close 2 Contracts (or 100% of your Contracts) Nov 15 $930/$940/$950 Modified Call Butterflies @ $3.63 Debit. DailyPlay Portfolio:  By Closing both Contracts, we will pay $646. We initially opened these 2 Contracts on October 30 @ $0.40 Credit. Our loss on this trade, therefore, is $283 per Contract.
• JNJ – 100% loss: Buy to Close 5 Contracts (or 100% of your Contracts) Nov 29 $160/$155 Put Vertical Spreads @ $3.56 Debit. DailyPlay Portfolio:  By Closing all 5 Contracts, we will pay $1,780  We initially opened these 5 Contracts on October 24 @ $0.83 Debit. Our loss on this trade, therefore, is $273 per Contract.
• VIX – 41% gain: Sell to Close 12 Contracts (or 100% of your Contracts) VIX Nov 20 $19/$16 Put Vertical Spreads @ $2.65 Credit DailyPlay Portfolio:  By Closing all 12 Contracts, we will receive $3,180  We initially opened these 12 Contracts on October 25 @ $1.57 Debit. Our gain on this trade, therefore, is $1,296 which is more than 1% gain on our total portfolio.

DailyPlay Portfolio Review

Our Trades

ADBE – 39 DTE

Bullish Debit Spread – Adobe Inc. (ADBE) has recently entered oversold territory and remains volatile, but it has started to build some upside momentum. We are currently profitable on the trade and plan to maintain our position. Our expiration date extends beyond the upcoming earnings report in early December, giving us the flexibility to hold the position through the announcement if we choose to.

COST – 4 DTE

Bearish Call Butterfly – This position is an interesting case. We intended for the stock to decline in price and for all the options to expire worthless, allowing us to capture the $0.40 net credit received when establishing the 1x3x2 butterfly position. The hedge provided by the long call vertical spread in the butterfly helped mitigate some risk. If the move to the middle strike (940) had occurred closer to the expiration date, the trade would have been notably profitable. At this point, it’s all about time decay, and if the stock were to remain around the 940 strike until expiration, it would become profitable because of theta decay. However, given the bullish momentum of the overall market, closing this position is warranted. We are closing this position today.

DIS – 32 DTE

Bullish Debit Spread – The Walt Disney Company (DIS) was lifted by the overall bullish market and has broken out of its previous trading range. We hope this upward trend continues as the company’s earnings date approaches, with earnings scheduled for November 14. We will maintain our current position for now.

IBM – 4 DTE

Bearish Credit Spread – We’re closely monitoring this bearish IBM position, which is currently at a loss. While there’s some weakness on the chart, expiration is quickly approaching, and we may need to close the position early in the week.

JNJ – 18 DTE

Bullish Credit Spread – Johnson & Johnson (JNJ) has broken through its downside support level in a strong bullish market environment. It has fallen to the long strike of our short put vertical spread (155), so it’s time to close the position and take the loss at this stage. We are closing this position today.

QQQ – 67 DTE

Bullish Calls – Invesco QQQ Trust (QQQ) – The conclusion of an election cycle often provides market clarity, reducing volatility and boosting investor confidence. We just established this position and plan to stay the course.

SQ – 11 DTE

Bullish Debit Spread – Block Inc. (SQ) announced earnings on November 7th. The stock opened lower after the announcement but finished with solid upside momentum by the close. We have a gain in the position and will stay the course for now.

XLF – 67 DTE

Bullish Debit Spread – Financial Select Sector SPDR ETF (XLF) – This position is part of our post-election cycle strategy. We’ve just established the long call position in the financial sector and plan to stay the course for now.

VIX – 8 DTE

Bullish Debit Spread – We are closing this position today.