DailyPlay – Opening Trade (XYZ) & Closing Trade (MSFT) – July 01, 2025

Closing Trade

• MSFT – 52% gain: Buy to Close 2 Contracts (or 100% of your Contracts) Aug 01 $475/$460 Put Vertical Spreads @ $2.45 Debit. DailyPlay Portfolio:  By Closing 2 Contracts, we will be paying $490. We initially opened these 2 contracts on June 17 @ $5.07 Credit. Our gain, therefore, is $524.

XYZ Bullish Opening Trade Signal

Investment Rationale

Investment Thesis:
Block Inc. (XYZ) presents a timely bullish setup, supported by strong recent price action and an attractive valuation. With earnings scheduled for August 7, 2025, traders have an opportunity to position ahead of the event without taking on direct earnings risk. Momentum has continued to build, and as the stock outperforms the broader market, our $85 upside target remains in focus. Our options strategy is designed to capture this strength while avoiding earnings-related volatility.

Technical Analysis:
XYZ recently broke out above multi-month consolidation with sustained accumulation and a constructive pattern of higher lows and higher highs. The stock has reclaimed both the 20-day and 50-day moving averages and is now pushing toward the 200-day at $71.32, which marks the next key resistance level. Relative strength continues to improve, and with volume building and RSI trending higher, the price action supports a bullish continuation setup. The $62 level marks solid support, aligning with the breakout base and prior resistance zone from late May.

Fundamental Analysis:
XYZ trades at a discount relative to its industry while boasting growth and profitability metrics that exceed its sector peers. The valuation gap, coupled with strong earnings and revenue projections, signals potential for multiple expansion and continued investor re-rating.

• Forward PE Ratio: 14.65x vs. Industry Median 26.35x
  
• Expected EPS Growth: 23.90% vs. Industry Median 11.69%
  
• Expected Revenue Growth: 11.39% vs. Industry Median 9.38%
  
• Net Margins: 10.93% vs. Industry Median 8.59%
  

Options Trade:
To capitalize on the bullish setup while avoiding earnings risk, we recommend selling a short-dated put vertical: Sell to Open 1 XYZ Aug 1, 2025 67/62 Put Vertical @ $1.78.  This trade collects a net credit of $1.78 ($178) with a defined risk of $3.22 ($322), yielding a potential 55% return on risk if XYZ stays above $67 through expiration. With 31 days to expiry, the setup benefits from time decay and technical support near $62, while avoiding the Aug 7 earnings event altogether.

XYZ – Daily

Trade Details

Strategy Details

Strategy: Short Put Vertical Spread

Direction: Bullish Credit Spread

Details: Sell to Open 6 XYZ Aug 01 $67/$62 Put Vertical Spreads @ $1.78 Credit per Contract.

Total Risk: This trade has a max risk of $1,932 (6 Contracts x $322) based on a hypothetical $100k portfolio risking 2%. We suggest risking only 2% of the value of your portfolio and divide it by $322 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/Mildly Bullish

Relative Strength: 2/10

OptionsPlay Score: 93

Stop Loss: @ $3.56 (100% loss to value of premium)

View XYZ 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 Monday’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 XYZ Trade