DailyPlay – Closing Trades (ANET, FDX) – December 20, 2024

Note:

• Today we are closing ANET for a profit at market opening.
• We made the call to also close FDX at market opening as the Earnings announcement today pushed the price higher.

Closing Trades

• ANET – 97% gain: Sell to Close 13 Contracts (or 100% of your Contracts) Jan 3 $105/$110 Call Vertical Spreads  @ $2.95 Credit. DailyPlay Portfolio:  By Closing all 13 Contracts, we will receive $3,835. We initially opened these 13 Contracts on Dec 11 @ $1.50 Debit. Our gain, therefore, is $1,885.
• FDX – 24% gain: Sell to Close 3 Skip-Strike Butterfly on the open (or 100% of your position) Dec 20 $305/$312.50/$327.50 Call Butterflies @ $1.20 Net Credit. DailyPlay Portfolio: By closing the position, we will receive $360 ($120 x 3). We initially opened these 3 butterflies on Dec 19 @ $0.55 Net Credit ($55 x 3 = $165). Our total proceeds, including the initial credit, are $525 ($360 + $165). Our percentage gain is calculated based on the maximum risk of the trade: Gain: $525, Maximum Risk: $2,250, Percentage Gain: 23% ($525 / $2,250).

Investment Rationale

We plan to close our position in FedEx (FDX) on Friday, which was featured as yesterday’s daily play. Our goal for this earnings trade was to capture a net credit of $0.55, or $55, per 1x2x1 Skip-Strike Butterfly position. Following the company’s earnings announcement and the resulting after-hours market reaction, there may be an opportunity to secure an additional net credit when closing the position. That’s not a typo – we opened the trade for a net credit, and we may be able to close it for a net credit as well. The ideal scenario would be for FDX to settle at the short strike of $312.50 right at the market close on Friday.

 We will update this post with the final transaction details after the market opens. This trade below was executed to close the position at the open of the market this morning.