DailyPlay – Opening Trade (CME) Closing Trade (SHOP) – January 16, 2025

Closing Trade

• SHOP – 85% loss: Sell to Close 3 Contracts (or 100% of your Contracts) Jan 17 $105/$115 Call Vertical Spreads  @ $0.83 Credit. 
  DailyPlay Portfolio: By Closing all 3 Contracts, we will receive $249. We initially opened this trade on Nov 15, 2024 @ $6.39 and then rolled it Jan 6 @ $2.29 Credit. Our loss therefore is $981.

CME Bullish Opening Trade Signal

Investment Rationale

CME Group Inc. (CME) recently broke out above its trading range with strong momentum and is outperforming the S&P 500, creating an opportunity for further upside to our target of $250.

From a fundamental perspective, CME appears moderately undervalued. While its valuations are in line with the industry, CME demonstrates far greater profitability. The company’s net margins exceed 55%, suggesting substantial upside potential.

CME currently trades at a forward price-to-earnings (PE) ratio of 22.06, compared to the industry average of 17.45. Expected earnings per share (EPS) growth for CME is 4.93%, while the industry average is higher at 13.19%. However, CME’s expected revenue growth stands at 5.42%, compared to the industry average of 8.37%. Most notably, CME’s net margins are an impressive 57.34%, far surpassing the industry average of 20.83%. The company is anticipated to report earnings on February 12, 2025, before the market opens.

CME – Daily

Trade Details

Strategy Details

Strategy: Long Call

Direction: Bullish Call

Details: Buy to Open 2 CME Feb 21, 2025 $220 Calls @ $11.20 Debit per Contract.

Total Risk: This trade has a max risk of $2,240 (2 Contracts x $1,120) based on a hypothetical $100k portfolio risking 2%. We suggest risking only 2% of the value of your portfolio and divide it by $1,1200 to select the # contracts for your portfolio.

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

1M/6M Trends: Mildly Bearish/Bullish

Relative Strength: 9/10

OptionsPlay Score: 76

Stop Loss: @ $5.60 (50% loss of premium)

View CME 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 CME Trade