DailyPlay – Partial Closing Trades (BDX, VRTX, ADI) Closing Trades (DAL, XLC) – August 2, 2022

Partial Closing Trades

• BDX – 57.41% Gain: Buy to Close 2 Contracts Aug 5, 2022 $237.5/$230 Put Verticals @ $1.15 Debit. DailyPlay Portfolio: By closing 2 of 4 Contracts, we will be paying $230. 
• VRTX – 71.71% Gain: Buy to Close 1 Contract Aug 19, 2022 $290/$310 Call Verticals @ $2.15 Debit. DailyPlay Portfolio: By closing 1 of 2 Contracts, we will be paying $215. 
• ADI – 61.54% Loss: Buy to Close 2 Contracts Aug 26, 2022 $165/$175 Call Verticals @ $6.30 Debit. DailyPlay Portfolio: By closing 2 of 3 Contracts, we will be paying $1,260. 

Closing Trades

• DAL – 53.46% Gain: Sell to Close 6 Contracts Aug 19, 2022 $30/$35 Call Verticals @ $2.44 Credit. DailyPlay Portfolio: By closing the remaining 6 of the 12 Contracts, we will be receiving $2,928. We took partial profits for this trade on July 21 at a $2.73 Credit. Therefore, the average gain on this trade was 62.58 % and the average cost basis to exit this trade is $2.59 Credit.
• XLC – 31.67% Loss: Buy to Close 5 Contracts Aug 5, 2022 $55/$61 Call Verticals @ $2.37 Debit. DailyPlay Portfolio: By closing all of the 15 Contracts, we will be paying $1,185. Note: this was a conditional trade that was closed for a profit at 10am this morning, when the condition described below was met.

Investment Rationale

Equities saw a mild sell-off yesterday, and not something unexpected by me given that Friday’s rally closed right on resistance levels in both the SPY and QQQ.  Was this but a one-day decline, or will we see some more? I suspect we’ll see a bit more before another more significant rally occurs over the coming weeks leading into the Jackson Hole meeting that investors will keenly focus on later this month. Between now and then, earnings and interest rates will most likely be the day-to-day driving force behind the market’s moves.

With just 4 trading days to go to expiration of our short August 5th BDX $237.50/$230 put spread, and the stock has closed at $244.71 yesterday, I see a daily Setup +9 count that also shows an overbought MACD move, along with the past 5 days in a row of roughly the same high. That is surely enough for me to take off 2 of the 4 contracts we have on this morning (generally, I don’t usually trade options before 9:50am ET earliest to get past less savvy retail investors’ orders). Moreover, should today also head into the last 20 mins. of trading at a price beneath Friday’s low of $242.02, then we’ll also kick out the remaining 2 contracts by the close.

BDX – Daily

We’re also short an August 5^th XLC $55/$61 call spread, so we’re running out of time for this to work. The stock closed yesterday at $56.29, so we’re well within striking distance of the $55 becoming out of the money for the call buyer by then. But with little time left, let’s put a bid in at the same $1.80 we originally shorted it for to potentially wash the trade in the next day or two. If we don’t get filled, we’ll exit on Thursday to avoid being exercised.

XLC – Daily