RACE Bearish Opening Trade Signal

Investment Rationale

RACE recently broke down above its trading range with strong momentum an underperforming the S&P 500, providing an opportunity for further downside to our $400 target. With industry leading growth rates and profitability metrics, RACE warrants a premium valuation relative to its peers, but at more than 4x the industry average, RACE has significant downside risks to its valuation.

RACE – Daily

Trade Details

Strategy Details

Strategy: Long Put Vertical Spread

Direction: Bearish Debit Spread

Details: Buy to Open 2 RACE November 15 $460/$440 Put Vertical Spreads @ $9.05 Debit per Contract.

Total Risk: This trade has a max risk of $1,810 (2 Contracts x $905) based on a hypothetical $100,000 portfolio risking 2%. We suggest using 2% of your portfolio value and divide it by $905 to select the # contracts for your portfolio.

Trend Continuation Signal: This is a bearish trade on a stock that is trading lower from a previous high.

1M/6M Trends: Bearish/Neutral

Relative Strength: 4/10

OptionsPlay Score: 116

Stop Loss: @ $4.53 (50% loss of premium)

View RACE 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 RACE Trade

Closing Trades

• XOM – 71% loss: Buy to Close 6 Contracts (or 100% of your Contracts) Nov 1st $120/$125 Call Vertical Spreads @ $2.65 Debit. DailyPlay Portfolio:  By Closing all 6 Contracts, we will pay $1,584. We initially opened these 6 Contracts on September 24 @ $1.54 Credit. This trade had a loss of $1.11 Debit per Contract.

• XOM – 65% gain: Sell to Close 6 Contracts (or 100% of your Contracts) Nov 1st $125 Calls @ $2.66 Credit. DailyPlay Portfolio:  By Closing all 6 Contracts, we will receive $1,596. We initially opened these 6 Contracts on October 2 @ $1.61 Debit. This trade generated $1.05 Credit per Contract. The combination of both XOM trades had a minimal loss of $0.06 Debit per Contract.

DailyPlay Portfolio Review

Our Trades

AAPL – 21 DTE

Bearish Credit Spread – Holding below key $230 resistance level, we’re looking for a continuation lower towards its $215 support level.

ABBV – 28 DTE

Bearish Puts – If ABBV breaks above the $200 resistance, it would warrants closing this position. For now we are closely monitoring this trade.

ALL – 14 DTE

Bullish Credit Spread – ALL is trading rangebound above support at $185. We will keep a close eye on this trade to see if support holds.

MMM – 14 DTE

Bearish Debit Spread – We’re looking for MMM to hold below $135 to reach our $122 downside target.

SHOP – 14 DTE

Bullish Calendar Spread – SHOP remains bullish as support at $76 is holding up, and we’re looking for a breakout towards the $85 target.

AAPL Bearish Opening Trade Signal

Investment Rationale

Apple Inc. (AAPL) has been rangebound between $215 and $232.50, recently rejecting the upper limit, suggesting it may revisit $215 before a breakout. Fundamentally, AAPL appears modestly overvalued, trading at a premium to peers despite only slightly higher growth, with its industry-leading margins not enough to justify the high valuation.

AAPL – Daily

Trade Details

Strategy Details

Strategy: Short Call Vertical Spread

Direction: Bearish Credit Spread

Details: Sell to Open 5 AAPL October 25 $235/$240 Call Vertical Spreads @ $1.06 Credit per Contract.

Total Risk: This trade has a max risk of $1,970 (5 Contracts x $394) based on a hypothetical $100,000 portfolio risking 2%. We suggest using 2% of your portfolio value and divide it by $394 to select the # contracts for your portfolio.

Counter Trend Signal: This is a bearish trade on a stock that is trading rangebound and not expected to continue higher.

1M/6M Trends: Bullish/Bullish

Relative Strength: 10/10

OptionsPlay Score: 96

Stop Loss: @ $2.12 (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 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 AAPL Trade

XOM Bullish Opening Trade Signal/ Trade Adjustment

Investment Rationale

Buy an extra November 1 $125 Call. I would prefer to pay $1.54 for the extra call, which is the net credit received from the initial credit spread. This makes the debit for the long call equal to the net credit received from the initial trade, putting us at even as far as debits and credits are concerned.

I like to call this strategy, “I don’t want the cheese anymore; just get me out of the trap.” If we break significantly above $120, the trade could become profitable – the sooner, the better for that breakout to the upside. If the stock pulls back and declines, we’ll likely let everything expire worthless, and in that case, we would break even on the entire position.

If you let too much time pass and the stock drifts up, that’s a bad outcome. We still have a short spread from $120 to $125 at expiration, and if we ride it all the way to expiration and the stock stops at $125, the extra long call does not help.

XOM – Daily

Trade Details

Strategy Details

Strategy: Long Call

Direction: Bullish Call

Details: Buy to Open 6 XOM November 1 $125 Calls @ $1.61 Debit per Contract.

Total Risk: This trade has a max risk of $966 (6 Contracts x $161) based on a hypothetical $100,000 portfolio risking 2%. We suggest using 2% of your portfolio value and divide it by $161 to select the # contracts for your portfolio.

Trend Continuation Signal: This is a bullish trade on a stock that is in a bullish trend.

1M/6M Trends: Bullish/Bullish

Relative Strength: 4/10

OptionsPlay Score: 51

Stop Loss: @ $0.81 (50% loss of premium)

View XOM 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 XOM Trade

MMM Bearish Opening Trade Signal

Investment Rationale

3M Company (MMM) has recently entered overbought territory on both daily and weekly timeframes, indicating signs of exhaustion and suggesting an increased likelihood of a selloff. While MMM is expected to grow EPS faster than its industry peers, negative revenue growth and slim margins pose significant downside risks, making it challenging for the company to meet these projections.

MMM – Daily

Trade Details

Strategy Details

Strategy: Long Put Vertical Spread

Direction: Bearish Debit Spread

Details: Buy to Open 24 MMM October 18 $135/$131 Put Vertical Spreads @ $0.86 Debit per Contract.

Total Risk: This trade has a max risk of $2,064 (24 Contracts x $86) based on a hypothetical $100,000 portfolio risking 2%. We suggest using 2% of your portfolio value and divide it by $86 to select the # contracts for your portfolio.

Counter Trend Signal: This is a bearish trade on a stock that formed a bearish divergence and is expected to continue lower.

1M/6M Trends: Bullish/Bullish

Relative Strength: 10/10

OptionsPlay Score: 160

Stop Loss: @ $0.43 (50% loss of premium)

View MMM 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 Monday’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 MMM Trade

DailyPlay Portfolio Review

Our Trades

ABBV – 32 DTE

Bearish Puts – Our immediate downside target for ABBV is $182, but if we breakout above $200 we would cut losses and move on. So far it is still holding below its $195 support and maintains its downside potential as it continues to underperform relative to the market. 

ALL – 18 DTE

Bullish Credit Spread – Allstate Corp. (ALL) remains in a moderately bullish trend, supported by strong fundamentals, so we’re staying the course with our position.

SHOP – 18 DTE

Bullish Calendar Spreads – Shopify (SHOP) remains bullish after its recent breakout, with expectations of continued upward momentum. With earnings set for early November, we’ve factored this into our option strategy and are staying the course.

XOM- 32 DTE

Bearish Credit Spread – Exxon Mobil Corp. (XOM) remains below the $117 resistance level and continues to drift lower, so we’re staying the course with our position.

DHI- 5 DTE

Bullish Calls and Combo – If you have not closed both positions yet, please do so today.

Closing Trades

• CLX – 28.79% gain: Sell to Close 7 Contracts (or 100% of your Contracts) Oct 18th $165 Puts @ $4.25 Credit. DailyPlay Portfolio:  By Closing all 7 Contracts, we will receive $2,975. We initially opened these 7 Contracts on September 17 @ $3.30 Debit. Our gain, therefore, is $665.
• PYPL – 102.22% gain: Sell to Close 19 Contracts (or 100% of your Contracts) Oct 18th $70/$75 Call Vertical Spreads @ $4.55 Credit. DailyPlay Portfolio:  By Closing all 19 Contracts, we will receive $8,645. We initially opened 11 Contracts on August 20 @ $1.99 Debit and then another 8
  Contracts on September 3 @ $2.61 Debit. Our gain, therefore, is $4,370 which is over 4% gain on our total Portfolio.

ABBV Bearish Opening Trade Signal

Investment Rationale

AbbVie Inc.(ABBV) recently broke below its trading range with strong momentum, underperforming the S&P 500. This breakdown suggests potential for further downside, with a target price of $183.

Although projected growth is in line with industry averages and net margins are comparable, ABBV trades at a 20% premium relative to its peers, presenting a significant downside risk.

ABBV – Daily

Trade Details

Strategy Details

Strategy: Long Put

Direction: Bearish Put

Details: Buy to Open 7 ABBV November 1 $185 Puts @ $291 Debit per Contract.

Total Risk: This trade has a max risk of $2,037 (7 Contracts x $291) based on a hypothetical $100,000 portfolio risking 2%. We suggest using 2% of your portfolio value and divide it by $291 to select the # contracts for your portfolio.

Trend Continuation Signal: This is a bearish trade on a stock that recently broke below its trading range and is expected to continue lower.

1M/6M Trends: Mildly Bearish/Bullish

Relative Strength: 5/10

OptionsPlay Score: 58

Stop Loss: @ $146 (50% loss of premium)

View ABBV 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 ABBV Trade

ALL Bullish Opening Trade Signal

Investment Rationale

Allstate Corp. (ALL) is undervalued, with strong fundamentals, including a 12.00% annual sales growth rate and a projected earnings growth rate of 19.00%. Its low P/E ratio of 12.06 and a dividend yield of 1.94%, along with a strong dividend growth rate of 14.00%, further enhance its attractive valuation.

ALL remains in a strong bullish trend with its recent pullback to its $190 support level provides an attractive risk to reward for seeking long exposure.

ALL – Daily

Trade Details

Strategy Details

Strategy: Short Put Vertical Spread

Direction: Bullish Credit Spread

Details: Sell to Open 5 ALL October 18 $185/$180 Put Vertical Spreads @ $90.00 Credit per Contract.

Total Risk: This trade has a max risk of $2,050 (5 Contracts x $410) based on a hypothetical $100,000 portfolio risking 2%. We suggest using 2% of your portfolio value and divide it by $410 to select the # contracts for your portfolio.

Trend Continuation Signal: This is a bullish trade on a stock that is currently in a strong bullish trend and with fundamental views aligned to the upside.

1M/6M Trends: Bullish/Bullish

Relative Strength: 8/10

OptionsPlay Score: 88

Stop Loss: @ $180 (100% loss to the value of premium)

View ALL 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 ALL Trade

Closing Trades

• UBER – 90% gain: Buy to Close 8 Contracts (or 100% of your Contracts) Oct 4th $69/$66 Put Vertical Spreads @ $0.05 Debit. DailyPlay Portfolio:  By Closing these Contracts, we will pay $40. We initially opened these 8 Contracts on September 66 @ $0.47 Credit. Our gain, therefore, is $336.
• DHI – 20.93% loss: Sell to Close 1 Contract (or 100% of your Contracts) Oct 4th $182.50/$207.50 Rish Reversal @ $0.52 Credit. DailyPlay Portfolio:  By Closing this Contract, we will receive $52. We initially opened this Contract on September 18 @ $0.43 Debit. Our loss, therefore, is $9.
• DHI – 13.41% loss: Sell to Close 1 Contract (or 100% of your Contracts) Jan 17th $170 Call @ $29.70 Credit. DailyPlay Portfolio:  By Closing this Contract, we will receive $2,970. We initially opened this Contract on September 19 @ $34.30 Debit. Our loss, therefore, is $460.

Investment Rationale

Our CLX trade is staying on course with these Puts as the stock recently dropped to 161.28 (low on 9/19) from 165.95 so it might have doubled on that day. For now we are keeping these trades open as we still have 23 days left until.

We are closing our UBER trade today for $0.05 Debit. There are still 9 days left until expiry so makes sense to close for a nickel today.

DHI closed at $192.37. The stock ran up to 199.85 on the 19th and was at $195.35 when we put the trade on. I most likely would not have sold the call on that day; however, it has sadly reversed course and is now at $192.37 as of September 24. With only 9 days left for the options to expire, we can still sell the call for $0.30 at the midpoint, and I would do that. Additionally, I would buy back the short put at the midpoint price of $0.80, only because we bought the deep-in-the-money call in DHI the very next day, which gives us long exposure to DHI. It is only a 1×1 spread, so let’s close this trade and be done with it. If we hadn’t bought the long call, I would just stay the course.

XOM Bearish Opening Trade Signal

Investment Rationale

XOM recently broke down below its trading range and has rallied back to its $117 resistance, providing an attractive risk/reward entry for bearish exposure. With revenue decline expected, EPS growth that is inline and Net margins below the industry average, XOM trades at a 13% premium relative to its industry suggesting possible downside. The stock has struggled to break out above 120. In fact, it hasn’t stayed above that level for a substantial amount of time since the end of April.

XOM – Daily

Trade Details

Strategy Details

Strategy: Short Call Vertical Spread

Direction: Bearish Credit Spread

Details: Sell to Open 6 XOM November 1 $120/$125 Call Vertical Spreads @ $154 Credit per Contract.

Total Risk: This trade has a max risk of $2,076 (6 Contracts x $346) based on a hypothetical $100,000 portfolio risking 2%. We suggest using 2% of your portfolio value and divide it by $346 to select the # contracts for your portfolio.

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

1M/6M Trends: Bullish/Bullish

Relative Strength: 5/10

OptionsPlay Score: 99

Stop Loss: @ $308 (100% loss to the value of premium)

View XOM 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 Monday’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 XOM Trade