DailyPlay Portfolio Review

Our Trades

AMGN – 52 DTE

Bullish Long Call – Amgen Inc. (AMGN) –  The stock recently broke through resistance with strong momentum. The position is profitable, and we plan to hold steady for now.

BIDU – 39 DTE

Bullish Credit Spread – Baidu, Inc. (BIDU) – This position was established recently and is slightly profitable. We plan to hold steady for now.

KMI – 39 DTE

Bearish Long Put – Kinder Morgan Inc. (KMI) – Since establishing this position last week, there have been no significant changes, so we plan to hold for now.

LRCX – 25 DTE

Bullish Long Call – Lam Research Corporation (LRCX) – We recently established this position and plan to stay the course for now.

PEP – 32 DTE

Bullish Credit Spread, PepsiCo, Inc. (PEP) – The stock recently broke out from its trading range to the upside with strong momentum. The position is profitable, and we plan to hold for now.

PWR – 52 DTE

Bullish Debit Spread – Quanta Services, Inc. (PWR) – The company announced earnings last week, and the stock reacted negatively to the announcement. We are down on the position but will maintain for now.

AAPL Bearish Opening Trade Signal

Investment Rationale

As Apple Inc. (AAPL) approaches its all-time highs, a series of mounting challenges has emerged. The latest iPhone 16 has not met sales expectations, signaling a more selective consumer. Additionally, AAPL faces stiff competition in their singular bet on the future of augmented reality, where rivals are putting pressure on the future of Apple’s Vision Pro. Moreover, Apple’s venture into artificial intelligence has been lackluster, failing to match the innovation of competitors who are setting the standard in AI. Compounding these issues, the economic slowdown in China, a critical market for Apple, is dampening sales further. And with AAPL trading at a lofty 65% premium over its peers, it’s becoming increasingly untenable given an outlook that lacks the dynamism to justify such a premium. This puts AAPL in a spot of vulnerability, suggesting that a breakout to new all-time highs here is less likely.

If we look at the chart of AAPL, it has underperformed the S&P 500 since hitting a new all-time high in December and has continued to print a series of lower lows and lower highs. This suggests that the stock might be due for a correction, especially considering its position near the top of its trading range.

And if we look at the business, AAPL’s valuation is hard to justify, trading at an 65% premium relative to its peers, despite growth metrics that are only in line with the industry. While its superior profitability has historically justified a premium valuation, recent slowdown in revenues and EPS growth puts this at significant risk.

• Forward PE Ratio: 33x vs. Industry Median 20x
• Expected EPS Growth: 11% vs. Industry Median 10%
• Expected Revenue Growth: 6% vs. Industry Median 6%
• Net Margins: 24% vs. Industry Median 13%

Without an immediate catalyst on the horizon, my preference is to take a bearish to neutral outlook by harnessing options premiums by Selling an Apr 4, $245/260 Call Vertical @ $6.20 Credit.

AAPL – Daily

Trade Details

Strategy Details

Strategy: Short Call Vertical Spread

Direction: Bearish Credit Spread

Details: Sell to Open 2 Contracts AAPL April 4 $245/$260 Call Vertical Spreads @ $6.20 Credit per Contract.

Total Risk: This trade has a max risk of $1,760 (2 Contracts x $880) based on a hypothetical $100k portfolio risking 2%. We suggest risking only 2% of the value of your portfolio and divide it by $880 to select the # contracts for your portfolio.

Counter Trend Signal: This is a bearish trade on a stock that is expected pull back from recent highs.

1M/6M Trends: Bullish/Bullish

Relative Strength: 8/10

OptionsPlay Score: 106

Stop Loss: @ $12.40 (100% loss to value of premium)

View AAPL 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 Friday ‘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 AAPL Trade

Closing Trades

• GOOGL– 43% loss: Buy to Close 3 Contracts (or 100% of your Contracts) Feb 28 $195/$185 Put Vertical Spreads @ $7.45 Debit. DailyPlay Portfolio:  We initially received a $3.07 net credit when we opened these three contracts on Jan 24. Therefore, the total net debit paid to close our position is $4.38 ($7.45 – $3.07), which is the loss per contract, or $1,314 in total. The total amount we had at risk was $3,000, which puts the loss at 43% ($1,314 / $3,000) of the capital at risk.

• DXCM– 2% gain: Sell to Close 7 Contracts (or 100% of your Contracts) Feb 21 $88/$92 Call Vertical Spreads @ $1.53 Credit. DailyPlay Portfolio:  DailyPlay Portfolio: By closing all seven contracts, we will receive $1,071 ($1.53 × 700). After our adjustment to the position on February 12, our cost basis was $1.50 per contract, or $1,050 ($1.50 × 700). Our gain, therefore, is $0.03 per contract, or $21 ($0.03 × 700).

KMI Bearish Opening Trade Signal

Investment Rationale

Kinder Morgan Inc. (KMI) recently broke below its trading range and has rallied back to resistance, creating an attractive risk/reward opportunity for bearish exposure with a downside target of $22.

Fundamentally, KMI appears significantly overvalued. It trades at a forward P/E ratio of 20.74x, which is 30% higher than the industry median of 15.36x. While its expected EPS growth of 8.22% exceeds the industry average of 6.52%, and its revenue growth of 8.34% is higer than the industry’s 3.29%, its net margins of 17.31% remain relatively close to the industry average of 15.10%.

KMI – Daily

Trade Details

Strategy Details

Strategy: Long Put

Direction: Bearish Put

Details: Buy to Open 13 Contracts KMI April 4 $28 Puts @ $1.53 Debit per Contract.

Total Risk: This trade has a max risk of $1,989 (13 Contracts x $153) based on a hypothetical $100k portfolio risking 2%. We suggest risking only 2% of the value of your portfolio and divide it by $153 to select the # contracts for your portfolio.

Trend Continuation Signal: This is a bearish trade on a stock that is expected to continue lower off an area of resistance.

1M/6M Trends: Bearish/Neutral

Relative Strength: 9/10

OptionsPlay Score: 99

Stop Loss: @ $0.77 (50% loss of premium)

View KMI 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 KMI Trade

Closing Trade

• NEM– 51% gain: Sell to Close 5 Contracts (or 100% of your Contracts) Feb 28 $42 Calls @ $5.80 Credit. DailyPlay Portfolio:  By Closing all 5 Contracts, we will receive $2,900. We initially opened these 5 Contracts on Feb 7 @ $3.85 Debit. Our gain, therefore, is $975 which is almost 1% gain on our Portfolio.

BIDU Bullish Opening Trade Signal

Investment Rationale

Baidu, Inc. (BIDU) recently broke out above resistance while outperforming the S&P 500 but pulled back following the company’s earnings announcement yesterday. It is now consolidating around the 90 level in a congested support area.

BIDU remains undervalued relative to its industry, despite growth and profitability metrics that are in line with sector averages. China’s latest deregulation efforts are expected to drive its tech and AI ambitions forward, positioning the country to compete more directly with the U.S. and enhancing shareholder value.

Fundamentally, BIDU is modestly undervalued. The company has a forward P/E ratio of 9.88x, significantly lower than the industry average of 20.89x. Its expected EPS growth is 10.88%, compared to 14.43% for the industry. Revenue growth is projected at 1.84%, while the industry average stands at 12.29%. However, BIDU maintains stronger profitability, with net margins of 15.81% versus the industry average of 7.89%.

BIDU – Daily

Trade Details

Strategy Details

Strategy: Short Put Vertical Spread

Direction: Bullish Credit Spread

Details: Sell to Open 5 Contracts BIDU April 4 $87/$80 Put Vertical Spreads @ $2.83 Credit per Contract.

Total Risk: This trade has a max risk of $2,085 (5 Contracts x $417) based on a hypothetical $100k portfolio risking 2%. We suggest risking only 2% of the value of your portfolio and divide it by $417 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: 5/10

OptionsPlay Score: 105

Stop Loss: @ $5.66 (100% loss to value of premium)

View BIDU 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 Tuesday ‘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 BIDU Trade

Closing Trade

• IWM – 66% loss: Sell to Close 2 Contracts (or 100% of your Contracts) Feb 21 $225 Straddles @ $3.72 Credit. DailyPlay Portfolio:  By Closing both Contracts, we will receive $744. We initially opened these Contracts on Jan 17 @ $10.96 Debit. Our loss, therefore, is $724 per contract.

DailyPlay Portfolio Review

Our Trades

AMGN – 58 DTE

Bullish Long Call – Amgen Inc. (AMGN) –  The stock price has been volatile since the recent earnings announcement, the position is profitable and we plan to stay the course for now.

DXCM – 3 DTE

Bullish Long Calls – DexCom, Inc. (DXCM) – We recently sold an option to convert our long call position in DXCM into a bull call spread ahead of earnings. The company announced earnings last week, and following the report, the stock saw a price increase. After a few adjustments, our cost basis is now $1.50, and we are slightly profitable on the position. We hope the stock’s upside momentum continues from the earnings move, but with expiration approaching quickly, we plan to close the position sooner rather than later.

GOOGL – 10 DTE

Bullish Credit Spread – Alphabet Inc. (GOOGL) – The stock declined after Alphabet’s earnings call, where the company announced plans for a substantial increase in AI spending. With the position under pressure, we’ll be keeping a close watch at the start of the week.

IWM – 3 DTE

Bullish Long Straddle – We are closing this position today.

LRCX – 41 DTE

Bullish Long Call – Lam Research Corporation (LRCX) – We recently established this position and plan to stay the course for now.

NEM – 10 DTE

Bullish Long Call – Newmont Corporation (NEM) – We have a profit on this position and plan to stay the course for now. The company is set to report earnings on Thursday, February 20th, after market close. Implied volatility is creeping up, which benefits our long call position. We now have to decide whether to close before earnings to avoid the event risk or convert the position into a long call spread and hold through the report.

PEP – 38 DTE

Bullish Credit Spread – PepsiCo, Inc. (PEP) – This position was recently established, and with no significant changes, we plan to hold steady for now.

PWR – 58 DTE

Bullish Debit Spread – Quanta Services, Inc. (PWR) – With the position newly established and little movement since, we see no reason to adjust our approach at this time. The company is set to report earnings on Thursday, February 20, 2025, before the market opens.

PWR Bullish Opening Trade Signal

Investment Rationale

Quanta Services Inc. (PWR) has recently reached oversold conditions on both daily and weekly timeframes, showing signs of exhaustion that suggest a strong rally ahead, with a target of $360.

Fundamentally, PWR is significantly overvalued and trades at a premium compared to its peers, but its faster-than-expected growth rates and the increasing demand for its services in the buildout of AI-related infrastructure help justify its valuation. PWR has a forward price-to-earnings (PE) ratio of 30.55x, well above the industry average of 22.29x. However, its expected earnings per share (EPS) growth is 18.24%, compared to the industry average of 12.17%, and its expected revenue growth is 12.24%, far outpacing the industry’s 3.65%. While PWR’s net margins are lower at 3.54% versus the industry average of 8.99%, its growth potential and strategic positioning in AI infrastructure make it an attractive investment despite its premium valuation. The company is set to announce earnings on Thursday, February 20, 2025, before the market opens.

PWR – Daily

Trade Details

Strategy Details

Strategy: Long Call Vertical Spread

Direction: Bullish Debit Spread

Details: Buy to Open 2 Contracts PWR April 17 $290/$330 Call Vertical Spreads @ $13.35 Debit per Contract.

Total Risk: This trade has a max risk of $2,670 (2 Contracts x $13.35) based on a hypothetical $100k portfolio risking 2%. We suggest risking only 2% of the value of your portfolio and divide it by $13.35 to select the # contracts for your portfolio.

Counter Trend Signal: This is a bullish trade on a stock that is expected to bounce off recent support.

1M/6M Trends: Bearish/Bearish

Relative Strength: 4/10

OptionsPlay Score: 111

Stop Loss: @ $6.68 (50% loss of premium)

View PWR 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 Thursday ‘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 PWR Trade

PEP Bullish Opening Trade Signal

Investment Rationale

PepsiCo, Inc. (PEP) has recently reached oversold conditions and is approaching a strong support level after the company announced earnings.  

PepsiCo reported mixed quarterly results, with earnings surpassing Wall Street’s expectations but revenue falling slightly short. The company posted adjusted earnings per share of $1.96, beating the consensus estimate of $1.94, while revenue came in at $27.78 billion, just below the expected $27.89 billion.  

From a fundamental perspective, PEP appears modestly undervalued. Despite the revenue miss, PepsiCo posted fourth-quarter net income attributable to the company of $1.52 billion, or $1.11 per share, up from $1.3 billion, or 94 cents per share, a year earlier.  

The stock trades at a forward price-to-earnings ratio of 17.29x, compared to the industry average of 19.82x, representing a discount to its peers, with growth expectations in line with the sector. While expected earnings growth is slightly below the industry average, PepsiCo continues to demonstrate strong revenue growth and solid net margins.

PEP – Daily

Trade Details

Strategy Details

Strategy: Short Put Vertical Spread

Direction: Bullish Credit Spread

Details: Sell to Open 5 Contracts PEP March 28 $140/$135 Put Vertical Spreads @ $1.16 Credit per Contract.

Total Risk: This trade has a max risk of $1,915 (5 Contracts x $383) based on a hypothetical $100k portfolio risking 2%. We suggest risking only 2% of the value of your portfolio and divide it by $383 to select the # contracts for your portfolio.

Counter Trend Signal: This is a bullish trade on a stock that is expected to bounce off recent support.

1M/6M Trends: Bearish/Bearish

Relative Strength: 2/10

OptionsPlay Score: 108

Stop Loss: @ $2.32 (100% loss to value of premium)

View PEP 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 PEP Trade

Closing Trade

• AAPL – 81% loss: Buy to Close 3 Contracts (or 100% of your Contracts) Feb 28 $225/$235 Call Vertical Spreads @ $6.40 Debit. DailyPlay Portfolio:  By Closing all 3 Contracts, we will pay $1,920. We initially opened these Contracts on Jan 22 @ $3.53 Credit. Our loss, therefore, is $287 per contract.

DXCM Bullish Adjusting Trade Signal

Investment Rationale

DexCom, Inc. (DXCM) – We currently hold a long call position in the Daily Play portfolio and are selling an option to adjust the position, creating a bull call vertical spread ahead of DexCom’s earnings announcement on Thursday, February 13, after the close. Recently, our short option in the diagonal spread expired, benefiting our position by reducing the cost basis of the current long option to $3.25.

We still consider DXCM to be fundamentally undervalued despite trading at a premium relative to its peers, as its valuation is supported by stronger growth and profitability metrics. The company has a forward price-to-earnings ratio of 43.54, compared to the industry average of 24.87. Its expected earnings per share growth is 23.36%, significantly higher than the industry average of 8.70%. DexCom’s expected revenue growth stands at 13.77%, compared to 6.34% for the industry. Additionally, the company’s net margins are 17.22%, outperforming the industry average of 14.13%.

• Current Position: Long 7 Feb 21, 2025, 88 Calls
• Days to Expiration (DTE): 10 days
• Current Cost Basis: $3.25 or $2,275 total for the 7 contracts (3.25 x 7 x 100

PLEASE NOTE that these prices are based on Tuesday ‘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. 

Trade Details

Strategy Details

Strategy: Adjustment of a Bullish Long Call

Direction: Resulting in a new Bullish Call Vertical Spread

Details: Sell to Open 7 Contracts Feb 21 $92 Call @ a $1.75 Credit, or  $1,225 ($1.75 x 7 x 100). This sale establishes a new Bull Call Vertical Spread in DXCM.

Resulting Position:

• Long: 7 Feb 21, 2025, 88 Calls
• Short: 7 Feb 21, 2025, 92 Calls

Based on a $1.75 fill for the short contract, the new cost basis is calculated as follows:

• New Cost Basis per Contract: $3.25 – $1.75 = $1.50
• Total Cost Basis for 7×7 Spread: $1,050 ($1.50 x 7 x 100)

1M/6M Trends: Bullish/Neutral

Relative Strength: 9/10

View DXCM Trade

Closing Trades

• AMD – 44% loss: Sell to Close 1 Contract (or 100% of your Contracts) June 20 $100 Call @ $17.63 Credit. DailyPlay Portfolio:  By Closing this Contract, we will receive $1,763. We initially opened this Contract on Dec 24 @ $31.92 Debit. Our loss, therefore, is $1,429.

• BA – 46% gain: Sell to Close 2 Contracts (or 100% of your Contracts) March 31 $170/$190 Call Vertical Spreads @ $10.68 Credit. DailyPlay Portfolio:  By Closing both Contracts, we will receive $2,136. We initially opened these 2 Contracts on Jan 8 @ $7.33 Debit. Our gain, therefore, is $670.

• TTWO – 91% loss: Buy to Close 3 Contracts (or 100% of your Contracts) Feb 28 $195/$205 Call Vertical Spreads @ $9.28 Debit. DailyPlay Portfolio:  By Closing all 3 Contracts, we will pay $1,320. We initially opened these 3 Contracts on Jan 28 @ $2.20 Credit. Our loss, therefore, is $660.

DailyPlay Portfolio Review

Our Trades

AAPL – 18 DTE

Bearish Credit Spread – Apple Inc. (AAPL) – The position is at a loss, but once again, the stock showed some weakness into the close on Friday. This weakness has been helpful for the position, and with considerable time remaining until expiration, no immediate action is planned. We are maintaining a tight watch.

AMD – 130 DTE

Bullish Long Call – Advanced Micro Devices, Inc. (AMD) – The position remains down, and last week’s earnings announcement didn’t provide the boost we had hoped for. While we’re not pulling the plug just yet, we’re keeping a close watch. There’s still plenty of time until the expiration of the option, but we’re ready to move quickly if the situation calls for it.

AMGN – 66 DTE

Bullish Long Call – Amgen Inc. (AMGN) – We just established this position, and the company announced earnings this week. The stock price has been volatile since the announcement, but the position is currently showing a gain, so we plan to stay the course for now.

BA – 39 DTE

Bullish Debit Spread – The Boeing Company (BA) –  We are up on this position, the stock has been range-bound since the earnings release. We still have plenty of time left in the option contracts and plan to stay the course for now.

DXCM – 11 DTE

Bullish Diagonal Spread – DexCom, Inc. (DXCM) – Our Bullish Diagonal Spread has now become a Bullish Long Call position. The shorter-term short option contract expired worthless this week, which has benefited the position, and we currently have a gain. The company is set to announce earnings after market close on Thursday, February 13, and we will need to decide on one of three actions: sell to close before earnings, hold through the earnings report as is, or sell another option contract to convert this into a bull call vertical spread ahead of the event.

GOOGL – 18 DTE

Bullish Credit Spread – Alphabet Inc. (GOOGL) – The company announced earnings this week, and the stock price took a hit, primarily due to Alphabet’s announcement during the conference call that it plans to significantly increase spending on AI. The position is down, and we will need to monitor it closely at the start of the week.

IWM – 11 DTE

Sharp Move Straddle – iShares Russell 2000 ETF (IWM) – We are down a bit on the position. We plan to hold steady for now, keeping a close eye as time value decays with the February 21 option contract expiration approaching.

LRCX – 39 DTE

Bullish Long Call – Lam Research Corporation (LRCX) – We recently established this position and plan to stay the course for now.

NEM – 18 DTE

Bullish Long Call – Newmont Corporation (NEM) – We recently established this position and plan to stay the course for now. Be aware that there is an earnings call on Thursday February 20th which is prior to the expiration of the option contract.

TTWO – 18 DTE

Bearish Credit Spread – Take-Two Interactive Software, Inc. (TTWO) – The company announced earnings this week, and the stock price jumped, erasing the gains in the position. We will keep a close watch at the beginning of the week and stand ready to close the position if needed.