DailyPlay – Opening Trade (DXCM) Closing Trade (PEP) – January 30, 2025

Closing Trade

• PEP – 26% gain: Sell to Close 5 Contracts (or 100% of your Contracts) Jan 31/Feb 14 $145/$150 Call Diagonal Spreads @ $5.37 Credit. DailyPlay Portfolio:  By Closing all 5 Contracts, we will receive $2,685. We initially opened these 5 Contracts on Jan 23 @ $4.25 Debit. Our gain, therefore, is $560.

DXCM Bullish Opening Trade Signal

Investment Rationale

We are looking at DexCom, Inc. (DXCM) again. We first added it to the DailyPlay portfolio after it broke out above its trading range, and the company was initially included in the Options Play research report in early December last year.

DexCom has been outperforming the S&P 500, providing an opportunity for further upside toward our $95 target. The company is set to announce earnings after market close on Tuesday, February 13.

We view the fundamentals of DXCM as significantly undervalued. The company trades at a premium relative to its peers, but its valuation is supported by faster-than-expected growth and stronger profitability metrics.

The company has a forward P/E ratio of 44.00x compared to the industry average of 24.87x. Expected EPS growth stands at 23.12%, significantly higher than the industry average of 8.70%. Revenue is expected to grow by 13.73% compared to 6.34% for its peers. Additionally, DexCom maintains a net margin of 17.22%, exceeding the industry average of 14.13%.

DXCM – Daily

Trade Details

Strategy Details

Strategy: Long Call Diagonal Spread

Direction: Bullish Call Diagonals

Details: Buy to Open 7 Contracts DXCM Feb 7/Feb 21 $88/$90 Call Diagonal Spreads @ $3.00 Debit per Contract.

Total Risk: This trade has a max risk of $2,100 (7 Contracts x $300) based on a hypothetical $100k portfolio risking 2%. We suggest risking only 2% of the value of your portfolio and divide it by $300 to select the # contracts for your portfolio.

Trend Continuation Signal: This is a bullish trade on a stock that is expected to continue its bullish trajectory.

1M/6M Trends: Bullish/Mildly Bullish

Relative Strength: 9/10

OptionsPlay Score: 82

Stop Loss: @ $1.50 (50% loss of premium)

View DXCM 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 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. 

View DXCM Trade