DailyPlay – Opening Trade (AAPL) Closing Trades (HLT, ARKK) Partial Closing Trade (SRE) September 30, 2022

Closing Trades

• HLT – 87.65% Gain: Sell to Close 4 Contracts October 21, 2022 $135/$125 Put Verticals @ $7.60 Credit. DailyPlay Portfolio: By Closing the remaining 4 of 8 Contracts, we will be receiving $3, 040. We took partial profit for this trade on September 22 at $6.30 Credit by closing half of the positions. Our average cost basis to exit the trade is, therefore, $6.95 Credit and the average gain is 71.61%.
• ARKK – 62.87% Loss: Sell to Close 8 Contracts November 18, 2022 $45/$54 Call Verticals @ $1.01 Credit. DailyPlay Portfolio: By Closing all 8 Contracts, we will be receiving $808. 

Partial Closing Trades

SRE -164.77% Gain: Sell to Close 1 Contract Oct. 21st $165/$145 Put Vertical @ $11.65 Credit. DailyPlay Portfolio: By Closing 1 of the remaining 3 Contracts, we will be receiving $1,165.

AAPL Bearish Opening Trade

View AAPL Trade

Strategy Details

Strategy: Short Call Vertical Spread

Direction: Bearish

Details: Sell to Open 1 Contract Nov. 11^th $145/$157.5 Call Vertical Spread @ $4.65 Credit.

Total Risk: This trade has a max risk of $785 (1 Contract x $785).

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

1M/6M Trends: Bearish/ Bearish

Technical Score: 5/10

OptionsPlay Score: 105

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 that 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 gave back Wednesday’s large gain (and more), and gave agata to all bulls who boasted that “the double bottom is in”.  ell… nope. At least not yet. Today is end of month and quarter, so it’d be no surprise to see some major swings in price. Even if we see a rally off of the DeMark -13s in many, many names, I don’t think the bounce gets materially above the 3819 level – the properly broken weekly TDST Line that previously had not been properly broken on the late-Spring decline to the June low. (It should now present resistance.)

As mentioned in yesterday’s post-close webinar Tony and I hosted, we are going to look to sell an upside call spread in Apple, with our belief that it will likely test its 2022 low area (if not further) in the fall. As such, we will look to put on a half-position today (i.e., 1% risk of a theoretical $100K size account vs. the normal 2% we risk on most trades) by selling the Nov. 11th $145/$157.5 call spread, collecting a $4.65 credit, or ~38% of the spread differential (that was $2.5 OTM as of Thursday’s close). That’s how much AAPL vol is juiced up right now.

AAPL – Weekly

Today, we also want to close out our remaining 4 HLT Oct. 21^st $135/$125 put spreads.

I will also take off one more of our long SRE Oct. 21 $165/$145 put spreads, bringing us down to now holding 2 of the original 5 spreads. This one is up 165% as of yesterday’s close.

And don’t forget that we can still look to enter yesterday’s TLT idea if it pulls back to the $102.50/$101.50 level by putting on the Oct. 14th $102/$98 put spread.

So, lots to do today. Have a good weekend.