DailyPlay – Opening Trade (ADBE) & Closing Trade (ZM) – June 04, 2025

Closing Trade

• ZM – 58% loss: Sell to Close 3 Contracts (or 100% of your Contracts) June 13 $80/$90 Call Vertical Spreads @ $1.97 Credit. 
  DailyPlay Portfolio:  By Closing 3 Contracts, we will be collecting $591. We adjusted this trade on May 20 and added $399 Credit bringing the total cost down to $1,410. Our loss, therefore, is $273 per contract.

ADBE Bullish Opening Trade Signal

Investment Rationale

Adobe Inc. (ADBE) presents a compelling bullish setup ahead of its upcoming earnings on June 12th. With shares recently regaining upward momentum and trading at a discount to peers despite comparable growth expectations, the stock is poised to outperform. Adobe remains a leader in creative and digital media software, and its subscription-based business model offers earnings visibility and margin stability. Heading into earnings, the risk/reward dynamic favors the bulls, particularly as the stock has started to outperform major indices like the S&P 500.

Technical Analysis:
ADBE recently broke out of a multi-month consolidation range, supported by accelerating momentum and strengthening relative performance. The stock’s rebound from key support, coupled with alignment above short-term moving averages and a rising RSI, points to continued upside potential. A decisive move above $415.70 would confirm a bullish trend reversal, though traders should remain cautious of overhead resistance at the 200-day moving average.

Fundamental Analysis:
Adobe is modestly undervalued relative to its peers, offering both growth and profitability at a discount. Despite industry headwinds in software valuations, Adobe’s consistent margin leadership and solid revenue growth underpin the bullish thesis:

• Forward PE Ratio: 20.02x vs. Industry Median 27.72x
  
• Expected EPS Growth: 11.83% vs. Industry Median 11.48%
  
• Expected Revenue Growth: 9.56% vs. Industry Median 9.36%
  
• Net Margins: 30.64% vs. Industry Median 9.80%
  

Options Trade:
A bull put vertical spread using the ADBE Jul 3, 2025 $410/$400 offers a compelling risk-defined opportunity ahead of earnings. The trade’s max profit can be achieved if ADBE holds above $410 at expiration. The strategy’s 0.80:1 reward-to-risk ratio is solid, especially given the higher probability of profit typically associated with bull put spreads. However, the June 12 earnings event introduces uncertainty that traders must manage within their position sizing and risk framework.

ADBE – Daily

Trade Details

Strategy Details

Strategy: Short Put Vertical Spread

Direction: Bullish Credit Spread

Details: Sell to Open 3 ADBE July 03 $410/$400 Put Vertical Spreads @ $4.45 Credit per Contract.

Total Risk: This trade has a max risk of $1,665 (3 Contracts x $555) based on a hypothetical $100k portfolio risking 2%. We suggest risking only 2% of the value of your portfolio and divide it by $555 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/Neutral

Relative Strength: 3/10

OptionsPlay Score: 95

Stop Loss: @ $8.90 (100% loss to value of premium)

View ADBE 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 Tuesday’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 ADBE Trade