DailyPlay – Opening Trade (TMUS) – November 2, 2023

TMUS Bullish Opening Trade Signal

View TMUS Trade

Strategy Details

Strategy: Short Put Vertical Spread

Direction: Bullish

Details: Sell to Open 6 Contracts Dec 15th $145/$140 Put Vertical Spreads @ $1.72 Credit per contract.

Total Risk: This trade has a max risk of $1,968 (6 Contracts x $328) based on a hypothetical $100,000 portfolio risking 2%. We suggest using 2% of your portfolio value and divide it by $328 to select the # contracts for your portfolio.

Trend Continuation Signal: This is a bullish trade on a stock that is in a bullish trend and is expected to continue higher.

1M/6M Trends: Bullish/Bullish

Relative Strength: 8/10

OptionsPlay Score: 89

Stop Loss: @ $3.50 Debit. (100% loss on premium paid)

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. 

Investment Rationale

The Fed’s decision yesterday largest sets up for a peak in interest rate hikes for 2023 and potentially into the rest of 2024. This has pared 10-year yield below 4.8%, giving equities a bit of breathing room. The S&P 500 and Nasdaq-100 both sit just above their major support levels at $4220 and $14,500 and would need to close above it for bulls to potentially wrestle back control. One of our positions, TMUS has worked out nicely in a short amount of time and provides an opportunity to add some further exposure. We will maintain our current position of the Dec $140/$135 Put Vertical for further potential gain, while selling the Dec $145/140 Put Vertical @ $1.72 Credit for more premium. With a hypothetical portfolio of $100,000, I recommend risking another 2% of the portfolio’s value to this roll, which is 6 Contracts for a risk of $1,968. We will set a stop loss on the put spread at around 100% of the premium collected @ $3.50 Debit.

TMUS – Daily