DailyPlay – Opening Trade (COPX) – June 24, 2022

Bearish Opening Trade Signal

View COPX Trade

Strategy Details

Strategy: Short Call Vertical Spread

Direction: Bearish

Details: Sell to Open 6 Contracts July 15, 2022 $31/$35 Call Verticals @ $0.93 Credit.

Total Risk: This trade has a max risk of $1,842 (6 Contracts x $307 per contract).

Trend Continuation Signal: This is a Bearish trade on a stock that is experiencing a bearish trend. 

1M/6M Trends: Bearish/Bearish

Technical Score: 4/10

OptionsPlay Score: 88

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

Copper has been under pressure since early April, but yesterday it cracked beneath prior important lows to put in what should be a fairly substantial top, with over a year worth of buyers now trapped. As such, we will look to sell a Global X Copper Miners ETF (COPX) July 15th $31/$35 call spread. (Last night this closed at $0.925 mid.) This has 22 days to expiration, and we’re taking in 23% of the spread. It’s a bit less than I’d typically like to collect, but with so many likely sellers coming on any rally, I don’t think it can move up much.

COPX – Daily