DailyPlay – Opening Trade (SCHW) – July 31, 2025

SCHW Bullish Opening Trade Signal

Investment Rationale

Investment Thesis
Charles Schwab Corp. (SCHW) presents a compelling bullish opportunity as macroeconomic tailwinds and firm-specific catalysts align to support further upside. The recent steepening of the yield curve directly enhances Schwab’s core business model—deploying client cash into longer-duration securities—which materially boosts net interest income. Additionally, Schwab’s lean cost base and scalable operations provide strong leverage to rising revenues. These dynamics, paired with growing investor risk appetite and sector leadership in capital markets, set the stage for continued outperformance into year-end and beyond.

Technical Analysis
The Charles Schwab Corporation (SCHW) broke out decisively above its multi-month consolidation, clearing the $94 resistance area with robust upward momentum. Presently, shares are positioned above the 20-, 50-, and 200-day moving averages, reinforcing a powerful trend across timeframes. The RSI is elevated at 75.2, indicating persistent buying pressure. While breakout volume remains steady rather than expanding, there is limited overhead resistance, pointing to further upside potential. The $108 area serves as the next technical objective, coinciding with a key Fibonacci extension and a psychological milestone.

Fundamental Analysis
Schwab trades at a noticeable valuation discount to peers, despite superior growth and profitability metrics that point to a structural edge in the brokerage and asset management landscape. The firm’s business model benefits disproportionately from rising interest rates and strong client asset flows, both of which are supportive heading into 2026.

• Forward PE Ratio: 22.42x vs. Industry Median 25.30x
• Expected EPS Growth: 22.51% vs. Industry Median 11.83%
• Expected Revenue Growth: 11.32% vs. Industry Median 7.62%
• Net Margins: 33.68% vs. Industry Median 21.10%

Options Trade
To position for further upside in SCHW, consider buying the SCHW Jan 16, 2026 87.5 Call for $14.80. This LEAPS call provides long-dated exposure to Schwab’s upside potential, with break-even at $102.30, just above current resistance targets and consistent with the $108 upside scenario. The strategy risks $1,480 per contract with unlimited reward potential beyond breakeven. This trade offers a defined-risk, leveraged expression of a bullish view with ample time for the thesis to play out amid favorable macro and company-specific drivers.

SCHW – Daily

Trade Details

Strategy Details

Strategy: Long Call

Direction: Bullish Call

Details: Buy to Open 1 SCHW Jan 16 $87.50 Call @ $14.80 Debit per Contract.

Total Risk: This trade has a max risk of $1,480 (1 Contract x $1,480) based on a hypothetical $100k portfolio risking 2%. We suggest risking only 2% of the value of your portfolio and divide it by $1,480 to select the # contracts for your portfolio.

Trend Continuation Signal: This is a bullish trade on a stock that is expected to continue higher over the duration of this trade.

1M/6M Trends: Bullish/Bullish

Relative Strength: 9/10

OptionsPlay Score: 83

Stop Loss: @ $7.40 (50% loss of premium)

View SCHW 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 SCHW Trade