GOOGL Bullish Opening Trade Signal

Investment Rationale

Alphabet Inc. (GOOGL) recently broke out above its $190 resistance level, printing a new all-time high while outperforming the S&P 500. This suggests further upside potential on strong momentum.

GOOGL trades in line with its peers but is expected to grow faster than its competitors and is far more profitable, suggesting substantial upside potential. GOOGL has a forward P/E ratio of 21.88x, slightly above the industry average of 20.54x. However, GOOGL’s expected earnings per share (EPS) growth is 19.15%, well above the industry average of 11.69%, and its expected revenue growth is 12.02%, compared to the industry’s 8.18%. Additionally, GOOGL boasts net margins of 27.74%, far surpassing the industry average of 13.82%.

The company is expected to report earnings on Tuesday, February 4th, after market close.

GOOGL – Daily

Trade Details

Strategy Details

Strategy: Short Put Vertical Spread

Direction: Bullish Credit Spread

Details: Sell to Open 3 GOOGL Feb 28 $195/$185 Put Vertical Spreads @ $3.98 Credit per Contract.

Total Risk: This trade has a max risk of $1,806 (3 Contracts x $602) based on a hypothetical $100k portfolio risking 2%. We suggest risking only 2% of the value of your portfolio and divide it by $602 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 trend.

1M/6M Trends: Bullish/Bullish

Relative Strength: 8/10

OptionsPlay Score: 103

Stop Loss: @ $7.96 (100% loss to value of premium)

View GOOGL 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 GOOGL Trade

PEP Bullish Opening Trade Signal

Investment Rationale

PepsiCo, Inc. (PEP) has recently reached oversold conditions on both daily and weekly timeframes, indicating a potential for a strong rally ahead.

From a fundamental perspective, PEP appears modestly undervalued. 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 industry, with growth expectations in line with the sector. Although expected earnings growth is slightly below the industry average, PepsiCo’s revenue growth and net margins remain strong. The stock also offers an attractive dividend yield, providing value for income-seeking investors. The company is set to report earnings on Tuesday, February 4, before the market opens.

PEP – Daily

Trade Details

Strategy Details

Strategy: Long Call Diagonal Spread

Direction: Bullish Call Diagonal Spread

Details: Buy to Open 5 PEP Jan 31/Feb 14 $145/$150 Call Diagonal Spreads @ $4.40 Debit per Contract.

Total Risk: This trade has a max risk of $2,200 (5 Contracts x $440) based on a hypothetical $100k portfolio risking 2%. We suggest risking only 2% of the value of your portfolio and divide it by $440 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 after being oversold.

1M/6M Trends: Bearish/Bearish

Relative Strength: 3/10

OptionsPlay Score: 100

Stop Loss: @ $2.20 (50% loss 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

AAPL Bearish Opening Trade Signal

Investment Rationale

Apple Inc. (AAPL) has recently reached overbought conditions on both daily and weekly timeframes, exhibiting signs of exhaustion that suggest a strong selloff may be ahead. Fundamentally, AAPL appears significantly overvalued, trading at a forward PE ratio of 32.91x, an 86% premium compared to the industry average of 17.89x. While its net margins of 23.97% are significantly higher than the industry average of 8.40%, justifying some level of premium valuation, the recent decline in its net margins highlights notable downside risks. Additionally, AAPL’s expected EPS growth of 11.42% falls below the industry average of 13.93%, and its expected revenue growth of 6.91% is only slightly above the industry average of 6.50%, further emphasizing its overvaluation concerns. Be aware that there is an earnings call on Jan 30, which is prior to the expiration date of this trade.

AAPL – Daily

Trade Details

Strategy Details

Strategy: Short Call Vertical Spread

Direction: Bearish Credit Spread

Details: Sell to Open 3 AAPL Feb 28, 2025 $225/$235 Call Vertical Spreads @ $3.68 Credit per Contract.

Total Risk: This trade has a max risk of $1,896 (3 Contracts x $632) based on a hypothetical $100k portfolio risking 2%. We suggest risking only 2% of the value of your portfolio and divide it by $632 to select the # contracts for your portfolio.

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

1M/6M Trends: Bearish/Mildly Bearish

Relative Strength: 3/10

OptionsPlay Score: 100

Stop Loss: @ $7.36 (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 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 AAPL Trade

DailyPlay Portfolio Review

Our Trades

AMD – 150 DTE

Bullish Long Call – Advanced Micro Devices, Inc. (AMD) – Although the position is currently down, we plan to stay the course for now, as there is still ample time remaining in the option contract. The company is expected to announce earnings after the close on Tuesday, February 4.

BA – 59 DTE

Bullish Debit Spread – The Boeing Company (BA) – We recently established this position and plan to stay the course for now. The company is expected to announce earnings before the open on Tuesday, January 28.

CME – 31 DTE

Bullish Long Call – CME Group Inc. (CME) – Although the position is currently showing a slight gain, we plan to stay the course for now, as there is still ample time remaining in the option contract. The company is expected to announce earnings after the close on Wednesday, February 12.

IWM – 31 DTE

Sharp Move Straddle – iShares Russell 2000 ETF (IWM) – We recently established this position and plan to stay the course for now.

NVDA – 31 DTE

Bullish Long Call – NVIDIA Corporation (NVDA) – We recently made a second adjustment to this position, reducing our cost basis on the long option contract. We then rolled the long call forward to extend its duration and plan to stay the course for now. NVIDIA is scheduled to announce earnings after the market close on Wednesday, February 26.

V – 59 DTE

Bullish Debit Spread – Visa Inc. (V) – We recently established this position and have a small gain; we plan to stay the course for now. The company is expected to announce earnings after market close on Thursday, January 30, 2025.

Closing Trades

• AAPL – 66% gain: Sell to Close 8 Contracts (or 100% of your Contracts) Jan 17/Jan 31 $232.50/$235 Put Diagonal Spreads @ $5.07 Credit. 
  DailyPlay Portfolio: By Closing all 8 Contracts, we will receive $4,056. We initially opened this trade on Jan 9, 2025 @ $3.05. Our gain, therefore, is $1,616.
• DXCM – 1% gain: Sell to Close 3 Contracts (or 100% of your Contracts) Jan 17 $75/$81 Call Vertical Spreads @ $5.90 Credit. 
  DailyPlay Portfolio: By Closing all 3 Contracts, we will receive $1,770. We initially opened this trade on Dec 3, 2024 @ $6.30 and then rolled it Jan 15 @ $0.48 Credit to give us a net Credit of $5.95. Our gain therefore is $15.

IWM Bullish Opening Trade Signal

Investment Rationale

The Daily Play today is a long straddle in the IWM. The rationale for considering this strategy in the Russell 2000 Small Cap Index, using the IWM ETF, is straightforward. Recently, the ETF has been trading within a tight range. Small-cap stocks are particularly sensitive to interest rate fluctuations, and inflation disproportionately affects them.

With the presidential inauguration on Monday and the transition of power, speculation is mounting, especially regarding tariffs, tax policy, spending, and debt management. Additionally, there’s uncertainty about how the Federal Reserve will evolve under the Trump administration.

We expect significant headlines in the coming days, though it’s unclear whether markets will react positively or negatively. This environment makes a long straddle appealing, as it positions for potential sharp moves in either direction.

Currently, the implied volatility rank (IV rank) on the platform is 34/100, indicating that volatility is at the lower end of the range. This suggests it’s not a bad entry point for buying options. Option traders use IV rank to determine whether implied volatility is high or low based on the past year’s data. High IV may indicate a selling opportunity, while low IV may suggest a buying opportunity.

At 34/100, IV is on the lower end, as 50/100 represents the midpoint. Once the strategy is established, an increase in implied volatility is ideal, as it raises the value of both options and suggests a greater likelihood of a price swing.

IWM – Daily

Trade Details

Strategy Details

Strategy: Long Straddle

Direction: Sharp Move Straddle

Details: Buy to Open 2 IWM Feb 21, 2025 $225 Straddles @ $10.85 Debit per Contract.

Total Risk: This trade has a max risk of $2,170 (2 Contracts x $1,085) based on a hypothetical $100k portfolio risking 2%. We suggest risking only 2% of the value of your portfolio and divide it by $1,085 to select the # contracts for your portfolio.

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

1M/6M Trends: Neutral/Neutral

Relative Strength: 5/10

OptionsPlay Score: 56

Stop Loss: @ $5.39 (50% loss of premium)

View IWM 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 IWM Trade

Closing Trade

• SHOP – 85% loss: Sell to Close 3 Contracts (or 100% of your Contracts) Jan 17 $105/$115 Call Vertical Spreads  @ $0.83 Credit. 
  DailyPlay Portfolio: By Closing all 3 Contracts, we will receive $249. We initially opened this trade on Nov 15, 2024 @ $6.39 and then rolled it Jan 6 @ $2.29 Credit. Our loss therefore is $981.

CME Bullish Opening Trade Signal

Investment Rationale

CME Group Inc. (CME) recently broke out above its trading range with strong momentum and is outperforming the S&P 500, creating an opportunity for further upside to our target of $250.

From a fundamental perspective, CME appears moderately undervalued. While its valuations are in line with the industry, CME demonstrates far greater profitability. The company’s net margins exceed 55%, suggesting substantial upside potential.

CME currently trades at a forward price-to-earnings (PE) ratio of 22.06, compared to the industry average of 17.45. Expected earnings per share (EPS) growth for CME is 4.93%, while the industry average is higher at 13.19%. However, CME’s expected revenue growth stands at 5.42%, compared to the industry average of 8.37%. Most notably, CME’s net margins are an impressive 57.34%, far surpassing the industry average of 20.83%. The company is anticipated to report earnings on February 12, 2025, before the market opens.

CME – Daily

Trade Details

Strategy Details

Strategy: Long Call

Direction: Bullish Call

Details: Buy to Open 2 CME Feb 21, 2025 $220 Calls @ $11.20 Debit per Contract.

Total Risk: This trade has a max risk of $2,240 (2 Contracts x $1,120) based on a hypothetical $100k portfolio risking 2%. We suggest risking only 2% of the value of your portfolio and divide it by $1,1200 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: Mildly Bearish/Bullish

Relative Strength: 9/10

OptionsPlay Score: 76

Stop Loss: @ $5.60 (50% loss of premium)

View CME 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 CME Trade

V Bullish Opening Trade Signal

Investment Rationale

Visa (V) recently broke out above its trading range with strong momentum, outperforming the S&P 500. This breakout provides an opportunity for further upside toward our $325 target. While Visa trades at a premium with a 27.48x forward P/E ratio compared to the industry average of 17.45x, its growth metrics remain competitive, including a 12.51% expected EPS growth versus 13.19% for the industry and a 9.88% expected revenue growth compared to the industry average of 8.37%. Additionally, Visa’s industry-leading profitability, highlighted by its 54.96% net margins against the industry average of 20.83%, underscores its significant upside potential. The company is expected to announce earnings after market close on Thursday, January 30.

V – Daily

Trade Details

Strategy Details

Strategy: Long Call Vertical Spread

Direction: Bullish Debit Spread

Details: Buy to Open 2 V Mar 21, 2025 $305/$325 Call Vertical Spreads @ $9.50 Debit per Contract.

Total Risk: This trade has a max risk of $1,900 (2 Contracts x $950) based on a hypothetical $100k portfolio risking 2%. We suggest risking only 2% of the value of your portfolio and divide it by $950 to select the # contracts for your portfolio.

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

1M/6M Trends: Bearish/Neutral

Relative Strength: 9/10

OptionsPlay Score: 90

Stop Loss: @ $4.75 (50% loss of premium)

View V 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. 

DXCM Bullish Trade Adjustment

Investment Rationale

We are making a quick adjustment to the DexCom, Inc. (DXCM). Although the stock was down most of the day, it finished strong. With the options in our spread expiring this Friday and some remaining volatility premium, we will capitalize on this opportunity and position for potential upside momentum as the week concludes. Specifically, we will buy to close our short option for pennies and sell to open a new option with the same expiration, closer to the current stock price, for a meaningful net credit.

Original Position:

• Long 3 Jan 17, 2025 75 Calls
• Short 3 Jan 17, 2025 92.5 Calls

The cost basis is $6.30 per 1×1 spread. For the entire position, consisting of three spreads, the total cost basis is $1,890 ($6.30 x 3 x 100) for the current position.

Trade Details

Resulting Position after Roll/Adjustment:

• Long 3 Jan 17, 2025 75 Calls
• Short 3 Jan 17, 2025 81 Calls

With a $0.48 net credit fill for the roll, the cost basis is reduced from $6.30 to $5.82 per 1×1 spread. For the entire position, consisting of three spreads, this results in a total cost basis of $1,746 ($5.82 x 3 x 100) for the new DXCM position.

Adjusting the Trade

Use the following details to Adjust the DXCM trade on your trading platform.

PLEASE NOTE that these prices above are based on Tuesday’s closing prices.

NVDA Bullish Trade Adjustment

Investment Rationale

It has been a turbulent journey since establishing our position in NVDA. We have sold a few option contracts against the long call that expired worthless, and we now find ourselves holding a straight long call position with only a few days left until expiration. Currently, the position is at a loss. Despite this, we maintain a bullish outlook on NVDA and plan to adjust the position by rolling it out in time while keeping the same strike price. The cost basis, after multiple adjustments, stands at $14.79 net debit. We will continue to update the cost basis as we make further adjustments and will closely monitor the position’s performance.

Original Position:

• Long 1 Jan 17, 2025 $124 Call
• Cost Basis after multiple adjustments is $14.79 Net Debit

Trade Details

Strategy Details

Strategy: Adjustment of a Bullish Long Call

Direction: Resulting in a new Bullish Long Call

Details: Sell to Close 1 Contract Jan 17 $124 Call and Buy to Open 1 Contract Fed 21 $124 Call @ a $3.70 net Debit, or $370 per 1×1 roll ($3.70 x 100). The total Net Debit Paid for rolling this 1 Call contract is $370. This roll establishes a new Long Call Position in NVDA.

Resulting Position after Roll/Adjustment:

• Long 1 Feb 21, 2025, $124 Call
• Based on a $3.70 net debit fill for the one contract, the cost basis would be $14.79 + $3.70, totaling $18.49 per contract or $1,849 ($18.49 x 1 x 100)

Adjusting the Trade

Use the following details to Adjust the NVDA trade on your trading platform.

PLEASE NOTE that these prices above are based on Monday’s closing prices.

Closing Trade

• QQQ – 51% loss: Sell to Close 1 Contract (or 100% of your Contracts) Jan 17 $495 Call @ $14.85 Credit. DailyPlay Portfolio: By Closing this Contract, we will receive $1,485. We initially opened this Contract on Nov 8 @ $30.53 Debit. Our loss, therefore, is $1,568.

DailyPlay Portfolio Review

Our Trades

AAPL – 4 DTE

Bearish Diagonal Spread – Apple Inc. (AAPL) – We are slightly up on the position we recently established and plan to stay the course for now. The company is expected to announce earnings after the close on Thursday, January 30.

AMD – 158 DTE

Bullish Long Call – Advanced Micro Devices, Inc. (AMD) – While we are currently down slightly, we plan to stay the course for now, as there is still ample time remaining in the option contract. The company is expected to announce earnings after the close on Tuesday, Feb 4.

BA – 67 DTE

Bullish Debit Spread -The Boeing Company (BA) We recently established this position and plan to stay the course for now. The company is expected to announce earnings before the open on Tuesday, January 28.

DXCM – 4 DTE

Bullish Debit Spread – DexCom, Inc. (DXCM) – We will either roll the short call down to bring in additional premium, which will lower our potential maximum gain while simultaneously reducing the cost basis on our long call, or close the position outright this week.

NVDA – 4 DTE

Bullish Long Call – NVIDIA Corporation (NVDA) –  We recently made a second adjustment to this position, which has lowered our loss basis on the long option contract. The short call option expired worthless, which was beneficial to the position. Expiration is quickly approaching on the long option, so we will either open a new short call position, creating a bull call vertical spread, or close the long option outright this week.

QQQ – 4 DTE

Bullish Long Call – We are closing this position today for a loss.

SHOP – 4 DTE

We’re currently down on the position but plan to hold steady for the time being. Last week, we rolled the short call down to generate additional premium. This adjustment reduced the cost basis on our long call, though it also decreased the potential maximum gain by reducing the width of the spread. Expiration is quickly approaching.

Closing Trade

• ADBE – 36% loss: Sell to Close 1 Contract (or 100% of your Contract) Feb 21 $425/$470 Call Vertical Spread @ $11.63 Credit. DailyPlay Portfolio:  By Closing this Contract, we will receive $1,163. We initially opened this Contract on Jan 7 @ $18.23 Debit. Our loss, therefore, is $660.

AAPL Bearish Opening Trade Signal

Investment Rationale

In light of the U.S. markets being closed on January 9, 2025, in observance of a national day of mourning for James Earl Carter, Jr., the thirty-ninth President of the United States, we will execute the following Daily Play on Apple, Inc. at the market open on Friday, January 10.  This will serve as our Daily Play communication for the day, in respect and honor of his memory.

Apple Inc. (AAPL) has recently reached overbought conditions on both daily and weekly timeframes, exhibiting signs of exhaustion that suggest a higher likelihood of a strong selloff ahead. Fundamentally, AAPL appears significantly overvalued, trading at an 86% premium relative to its peers. While its net margins of 23.97% exceed the industry average of 8.40%, justifying a premium valuation, the recent decline in these margins introduces significant downside risks. AAPL’s forward PE ratio of 33.86x is considerably higher than the industry average of 17.89x. Additionally, its expected EPS growth of 11.41% and revenue growth of 6.91% are only marginally different from the industry averages of 13.93% and 6.50%, respectively. The company is expected to announce earnings after the close on Thursday, January 30, 2025, which will be factored into the option strategy chosen for today’s play.

AAPL – Daily

Trade Details

Strategy Details

Strategy: Long Put Diagonal Spread

Direction: Bearish Put Diagonal Spread

Details: Buy to Open 8 Contracts AAPL Jan 17/Jan 31 $232.50/$235 Put Diagonal Spreads @ $2.38 Debit per Contract.

Total Risk: This trade has a max risk of $1,904 (8 Contracts x $238) based on a hypothetical $100k portfolio risking 2%. We suggest risking only 2% of the value of your portfolio and divide it by $238 to select the # contracts for your portfolio.

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

1M/6M Trends: Mildly Bearish/Bullish

Relative Strength: 7/10

OptionsPlay Score: 99

Stop Loss: @ $1.19 (50% loss 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 Wednesday’s closing prices, with consideration given to the market holiday in honor of President Carter. Should the underlying move significantly during pre-market hours, we will likely adjust the strikes and prices to reflect a more accurate trade entry.

View AAPL Trade