DailyPlay – Opening Trade (NEM) Closing Trades (UBER, VRTX) Partial Closing Trade (CRM) – August 10, 2022

Closing Trades

• UBER – 98.39% Gain: Buy to Close 1 Contract Aug 19, 2022 $22.50 Put @ $0.02 Debit. DailyPlay Portfolio: By closing 1 Contract, we will be paying $2. Initially, we only opened 1 Contract, which we are now closing.
• VRTX – 24.61% Loss: Buy to Close 1 Contract Aug 19, 2022 $290/$310 Call Verticals @ $9.47 Debit. DailyPlay Portfolio: By closing the remaining 1 of 2 Contracts, we will be paying $947. We took partial profits for this trade on August 2 at a $2.73 Debit. Therefore, the average gain on this trade is 23.55 % and the average cost basis to exit this trade is $5.81 Debit.

Partial Closing Trade

• CRM -18.49% Gain: Buy to Close 1 Contract Sept 2, 2022 $175/$160 Put Verticals @ $3.57 Debit. DailyPlay Portfolio: By closing 1 of the 2 Contracts, we will be paying $357.

Bullish Opening Trade Signal

View NEM Trade

Strategy Details

Strategy: Long Call Vertical Spread

Direction: Bullish

Details: Buy to Open 12 Contracts Sept 16, 2022 $45/$50 Call Verticals @ $1.61 Debit.

Total Risk: This trade has a max risk of $1,932 (12 Contracts x $161 per contract).

Counter Trend Signal: This is a Bullish trade on a stock that is experiencing a bearish trend. 

1M/6M Trends: Bearish/Bearish

Technical Score: 2/10

OptionsPlay Score: 118

Entering the Trade

Use the following details to enter the trade on your trading platform. Please note that if there is a multi-leg option strategy, it should be entered as a single trade. 

Please note these prices are based on the previous day’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. This will be reflected in the Portfolio tab within the OptionsPlay platform.

Investment Rationale

Stocks took a minor breather yesterday as tech names were hit hardest after Micron disappointed investors. The SPX is still up against general resistance in the 4150 neighborhood, and less bullish traders are taking some profits on recent purchases.

For today’s DP, I noticed that Newmont Goldcorp (NEM) now has a weekly Setup -9 count that is also in the vicinity of its 6-yr. uptrend line from the secular lows in late-2015. As such, and with the VIX near its lows for most of this year, we’ll look to buy a NEM Sept. 16th $45/$50 call spread. Yesterday, this went out at $1.92, and has a very reasonable cost of just 26% of the strike differential.

If the VIX had been nearer 30 (than the current sub-22), I’d really prefer to play this by selling a $45/$37.5 put spread, but there’s just no juice in selling most options right now.

NEM – Weekly

We’re also short two CRM Sept. 2nd $175/$160 put spreads. The stock has stalled right at resistance and yesterday broke beneath its near-term uptrend line.  Let’s remove one of those two contracts today.

CRM – Daily

Let’s also close out our short UBER August 19th $22.5 put. We’ve taken out almost the entire value of what we collected (~98%) and with a Setup +9 count against prior TDST resistance, there’s just no reason not to run with what we already have made.

UBER – Daily

Lastly, let’s close out of our short 1 contract of the VRTX August 19th $290/$310 call spread. We’re down about 25%, but with it having reported earnings last week and beaten estimates, we run the risk that this goes up to that $310 area. (When I can, I like taking small losses.)

VRTX – Weekly