DailyPlay – Closing Trade (RACE), Portfolio Review – October 14, 2024

Closing Trade

RACE – 42.16% loss: Sell to Close 2 Contracts (or 100% of your Contracts) November 15 $460/$440 Put Vertical Spreads @ $5.90 Credit. DailyPlay Portfolio:  By Closing both Contracts, we will receive $1,180. We initially opened these 2 Contracts on October 7 @ $10.20 Debit. Our loss on this trade, therefore, is $430 per Contract.

Investment Rationale

We are Closing this position today based on recent news that might influence the stock price. Recent news: JPMorgan upgraded Ferrarri (RACE) from Neutral to Overweight and massively upgraded its price target from $385 to $525 per share. Analysts cited such attributes as Ferrarri’s unit volume growth, discipline, and innovation as drivers for the upgrade and price target boost.

DailyPlay Portfolio Review

Our Trades

AAPL – 18 DTE

Bearish Credit Spread – In Apple Inc. (AAPL) we recently rolled our credit spread position out and down to the November 1 $225/$230 call vertical to collect another $2.08 in credit. The trend is still bearish, and we are staying the course while remaining aware that the company is anticipated to announce earnings on October 31st.

ABBV – 18 DTE

Bearish Puts – ABBV (AbbVie Inc.) is still holding below its $195 support and maintains downside potential as it continues to underperform relative to the market. The anticipated earnings date is 10/30/24, and the gradual increase in implied volatility (IV) as earnings approach has kept our out-of-the-money (OTM) put alive in this trade. However, the position is on a short leash this week. If the stock closes above $195 or does not start drifting downward, we will close the position and move on from our long puts.

DIS – 11 DTE

Bullish Calendar Spreads – After struggling to grow in recent quarters, DIS has reversed course, showing improvements in both revenue and EPS growth. With the company set to report on November 14th, this known event plays a significant role in our strategy. Ideally, we’d like the stock to slow its roll, or we may have to roll the short-term option contracts up and out. The bullish move this week is positive for our position, but with a strike at $95, we don’t want the stock to move too quickly above our strike. It’s not a bad problem to have, but we may need to adjust sooner rather than later if the bullish trend continues.

META – 4 DTE

Bullish Call Butterflies – Meta has been volatile recently but is currently within the wings of our modified butterfly, giving us a smidgen of a gain. We still think the stock can retest the $600 level, but with the expiration date approaching this Friday, the position will be interesting to watch as it reflects every stock price tick until then. We need to monitor this position closely.

MMM – 4 DTE

Bearish Debit Spread – 3M Company (MMM) is still lingering in overbought territory, with expiration fast approaching this Friday. We currently have a small gain on the position, but this is another one we need to keep a close eye on.