DailyPlay – Opening Trade (FDX) – December 19, 2024

FDX Bearish Opening Trade Signal

Investment Rationale

FedEx (FDX) – FedEx has exhibited strong bearish momentum recently, and we anticipate this trend to persist into the company’s upcoming earnings report on Thursday, Dec. 19, after the market close. Implied volatility indicates a stock price range of plus or minus $29, approximately 10% of the current stock price. For Q2 fiscal 2025, FedEx is expected to report earnings of $3.90 per share, reflecting a 2.3% year-over-year decline, with revenue projected at $22.07 billion, down 0.5%. Challenges such as demand erosion, geopolitical uncertainty, and inflation are expected to weigh heavily on results, particularly in Asia and Europe. The Express segment, FedEx’s largest, is anticipated to face volume-driven revenue declines, with an expected drop of 0.3%. FedEx’s ongoing struggles to manage demand pressures and control costs are likely to continue impacting its performance in the post-COVID business environment.

FDX – Daily

Trade Details

Strategy Details

Strategy: Skip-Strike Call Butterfly 

Direction: Bearish Call Butterfly

Details: Buy to Open 3 FDX Dec 20, 2024 $305/$312.50/$327.50 Call Butterflies @ $0.55 Credit per Contract. This strategy generates a Credit and not a Debit like a standard Butterfly.

Breakdown: The individual legs for the skip-strike butterfly are as follows

• Buy 1 Contract Dec 20 $305 Call
• Sell 2 Contracts Dec 20 $312.50 Calls
• Buy 1 Contract Dec 20 $327.50 Call

Total Risk: This trade has a max risk of $2,085 (3 Contracts x $695) based on a hypothetical $100,000 portfolio normally risking 2%. We suggest using 2% of your portfolio value and divide it by $695 to select the # contracts for your portfolio.

Trend Continuation Signal: This is a bearish trade on a stock that is expected to continue its bearish trajectory.

1M/6M Trends: Bearish/Bearish

Relative Strength: 6/10

OptionsPlay Score: 250

Stop Loss: @ $1.10 (100% loss to value of premium received)

View FDX 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 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. 

View FDX Trade