DailyPlay – Opening Trade (LRCX) Closing Trade (UPS) – January 31, 2025

Closing Trade

• UPS – 30% gain: Sell to Close 10 Contracts (or 100% of your Contracts) Jan 31 $131/$134/$140 Put Butterflies @ $2.95 Credit. DailyPlay Portfolio:  By Closing all 10 Contracts, we will receive $2,950. We initially opened these 10 Contracts on Jan 29 @ $2.27 Debit. Our gain, therefore, is $680. The posted closing price for the trade represents the most likely scenario as the market closes today. To exit the trade, a limit order will be placed at the $2.95 price.

LRCX Bullish Opening Trade Signal

Investment Rationale

Lam Research Corporation (LRCX) recently broke out above its trading range with strong momentum, outperforming the S&P 500 and providing an opportunity for further upside to our $105 target.

LRCX appears moderately undervalued despite trading in line with industry valuations, given its stronger growth and profitability. It has a price-to-sales ratio of 21.22x vs. the industry’s 23.02x, with expected EPS growth of 17.86% (industry: 16.62%) and revenue growth of 12.22% (industry: 8.73%). Its 26.02% net margin also outperforms the industry’s 19.87%. Yesterday Lam Research posted adjusted EPS of $0.91 on $4.38 billion in revenue, beating expectations, and projects $4.65 billion next quarter. Shares rose over 5% post-earnings.

LRCX – Daily

Trade Details

Strategy Details

Strategy: Long Call

Direction: Bullish Call

Details: Buy to Open 2 Contracts LRCX Mar 21 $74 Calls @ $9.05 Debit per Contract.

Total Risk: This trade has a max risk of $1,810 (2 Contracts x $905) based on a hypothetical $100k portfolio risking 2%. We suggest risking only 2% of the value of your portfolio and divide it by $905 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: Bullish/Mildly Bullish

Relative Strength: 3/10

OptionsPlay Score: 84

Stop Loss: @ $4.53 (50% loss of premium)

View LRCX 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 Thursday ‘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 LRCX Trade