TMUS Bullish Opening Trade Signal

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Strategy Details

Strategy: Short Put Vertical Spread

Direction: Bullish

Details: Sell to Open 6 Contracts Dec 15th $145/$140 Put Vertical Spreads @ $1.72 Credit per contract.

Total Risk: This trade has a max risk of $1,968 (6 Contracts x $328) based on a hypothetical $100,000 portfolio risking 2%. We suggest using 2% of your portfolio value and divide it by $328 to select the # contracts for your portfolio.

Trend Continuation Signal: This is a bullish trade on a stock that is in a bullish trend and is expected to continue higher.

1M/6M Trends: Bullish/Bullish

Relative Strength: 8/10

OptionsPlay Score: 89

Stop Loss: @ $3.50 Debit. (100% loss on premium paid)

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. 

Investment Rationale

The Fed’s decision yesterday largest sets up for a peak in interest rate hikes for 2023 and potentially into the rest of 2024. This has pared 10-year yield below 4.8%, giving equities a bit of breathing room. The S&P 500 and Nasdaq-100 both sit just above their major support levels at $4220 and $14,500 and would need to close above it for bulls to potentially wrestle back control. One of our positions, TMUS has worked out nicely in a short amount of time and provides an opportunity to add some further exposure. We will maintain our current position of the Dec $140/$135 Put Vertical for further potential gain, while selling the Dec $145/140 Put Vertical @ $1.72 Credit for more premium. With a hypothetical portfolio of $100,000, I recommend risking another 2% of the portfolio’s value to this roll, which is 6 Contracts for a risk of $1,968. We will set a stop loss on the put spread at around 100% of the premium collected @ $3.50 Debit.

TMUS – Daily

PSX Bearish Opening Trade Signal

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Strategy Details

Strategy: Short Call Vertical Spread

Direction: Bearish

Details: Sell to Open 6 Contracts Dec 15th $115/$120 Call Vertical Spreads @ $1.88 Credit per contract.

Total Risk: This trade has a max risk of $1,872 (6 Contracts x $312) based on a hypothetical $100,000 portfolio risking 2%. We suggest using 2% of your portfolio value and divide it by $312 to select the # contracts for your portfolio.

Counter Trend Signal: This is a bearish trade on a stock that is trading neutral, but expected to break lower.

1M/6M Trends: Neutral/Neutral

Relative Strength: 9/10

OptionsPlay Score: 97

Stop Loss: @@ $3.75 Debit. (100% loss on premium paid)

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. 

Investment Rationale

With oil prices in retreat, energy stocks are losing its leadership and at risk of pulling back. If we look at PSX, it recently has started to complete the right shoulder in a head & shoulders topping formation. This is a sign that there could be some downside as oil prices trade near 6-month lows and broke below key level of support at $83. This will put pressure on energy stocks global breakeven costs continue to rise and demand continues to remain soft despite restrictions on supply. PSX also trades at the higher end of its valuation compared to its peers considering analysts are expecting EPS to contract by 15% in FY2024. While my view isn’t overly bearish, I think it’s an opportunity to establish a neutral to bearish stance by selling a call spread. I’m looking to sell the Dec $115/120 Call Vertical @ $1.88 Credit. With a hypothetical portfolio of $100,000, I recommend risking 2% of the portfolio’s value to this roll, which is 6 Contracts for a risk of $1,872. We will set a stop loss on the put spread at around 100% of the premium collected @ $3.75 Debit.

PSX – Daily

UAL Bullish Opening Trade Signal

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Strategy Details

Strategy: Long Call Vertical Spread

Direction: Bullish

Details: Buy to Open 13 Contracts Dec 15th $35/$40 Call Vertical Spreads @ $1.58 Debit per contract.

Total Risk: This trade has a max risk of $2,054 (13 Contracts x $158) based on a hypothetical $100,000 portfolio risking 2%. We suggest using 2% of your portfolio value and divide it by $158 to select the # contracts for your portfolio.

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

1M/6M Trends: Bearish/Bearish

Relative Strength: 2/10

OptionsPlay Score: 105

Stop Loss: @ $0.80 Credit. (50% loss on premium paid)

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. 

Investment Rationale

Despite rallying over 1% after last week’s selloff, bonds continued to sell off and yields climbed above 4.85%. This remains the primary headwind for equities alongside an earnings season that is showing signs of uncertainty for the future. As we look for opportunities, we seek weak sectors that are showing signs of selloff exhaustion and have bounce potential. One sector worth paying attention to is the Airline industry. With oil prices moderating, and international travel continuing to show signs of strength, international carriers such as UAL stand to potentially benefit. Trading at only 3.5x forward earnings, UAL trades at a substantial discount to its historical valuations and presents a great bounce opportunity. I’m looking to Buy the Dec $35/$40 Call Vertical @ $1.58 Debit. With a hypothetical portfolio of $100,000, I recommend risking 2% of the portfolio’s value to this roll, which is 13 Contracts for a risk of $2,054. We will set a stop loss on the put spread at around 50% of the premium paid @ $0.80 Credit.

UAL – Daily

Closing Trade

• RCL – 34.19% Gain: Sell to Close 4 Contracts (or 100% of your Contracts) Nov 17th $90/$75 Put Vertical Spreads @ $7.06 Credit. DailyPlay Portfolio: By Closing all 4 Contracts, we will be receiving $2,824. We initially opened these 4 Contracts on Oct 18 @ $5.26 Debit. Our average gain, therefore, is $180 per contract. 
• SNAP – 42.59% Loss: Sell to Close 38 Contracts (or 100% of your Contracts) Nov 17th $9/$7 Put Vertical Spreads @ $0.31 Credit. DailyPlay Portfolio: By Closing all 38 Contracts, we will be receiving $1,178. We initially opened these 38 Contracts on Oct 20 @ $0.54 Debit. Our average loss, therefore, is $23 per contract. 

TMUS Bullish Opening Trade Signal

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Strategy Details

Strategy: Short Put Vertical Spread

Direction: Bullish

Details: Sell to Open 6 Contracts Dec 15th $140/$135 Put Vertical Spreads @ $1.81 Credit per contract.

Total Risk: This trade has a max risk of $1,914 (6 Contracts x $319) based on a hypothetical $100,000 portfolio risking 2%. We suggest using 2% of your portfolio value and divide it by $319 to select the # contracts for your portfolio.

Trend Continuation Signal: This is a bullish trade on a stock that is neutral to bullish

1M/6M Trends: Neutral/Mildly Bullish

Relative Strength: 7/10

OptionsPlay Score: 89

Stop Loss: @ $3.60 Debit. (100% loss).

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. 

Investment Rationale

Both the S&P and Nasdaq indices printed fresh recent lows last week below key major support levels. However, there are signs that the sell off that now bleeds into all sectors are showing some signs of exhaustion. Lower low’s in price are no longer confirmed by lower lows in momentum, this leads to a higher probability of a bounce in equities. The question is how far? My view is that this is an opportunity to start reducing bearish exposure, add neutral to bullish exposure in the short run and see. With this in mind, we are going to close out our RCL (which intra-week reached our $78.50 target) and SNAP positions, while adding TMUS to our DailyPlay portfolio. After reporting strong guidance on earnings last week, TMUS’s recent revisit of its $140 support level provides a strong risk/reward entry for bullish exposure. It’s strong free cash-flow and low churn rates provides safety for investors as the outlook for consumers continue to look more uncertain. I’m looking to sell the Dec $140/$135 Put Vertical @ $1.81 Credit. With a hypothetical portfolio of $100,000, I recommend risking 2% of the portfolio’s value to this roll, which is 6 Contracts for a risk of $1,914. We will set a stop loss on the put spread at around 100% of the premium collected @ $3.60 Debit.

TMUS – Daily

SBUX Bearish Opening Trade Signal

View SBUX Trade

Strategy Details

Strategy: Short Call Vertical Spread

Direction: Bearish

Details: Sell to Open 5 Contracts Nov 24th $92/$98 Call Vertical Spreads @ $2.44 Credit per contract.

Total Risk: This trade has a max risk of $1,780 (5 Contracts x $356) based on a hypothetical $100,000 portfolio risking 2%. We suggest using 2% of your portfolio value and divide it by $356 to select the # contracts for your portfolio.

Trend Continuation Signal: This is a bearish trade on a stock that is in a bearish

1M/6M Trends: Bearish/Bearish

Relative Strength: 4/10

OptionsPlay Score: 100

Stop Loss: @ $5.00 Debit. (100% loss of premium paid)

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. 

Investment Rationale

The S&P 500 and the Nasdaq-100 have now both broken its major support levels at $4220 and $14,500 yesterday. This is a bearish signal that could open up further downside in equities. We currently have two large bearish positions in AAPL and RCL that are profitable with more downside potential. One position that is near breakeven but has further potential is SBUX. I’m going to suggest adding further bearish exposure in SBUX here by selling another 5 contracts of the Nov 24 $92/98 Call Vertical @ $2.44 Credit. This is risking roughly another 2% of our hypothetical $100,000 portfolio. We will move our stops on the call spread to around 100% of the premium collected @ $5.00 Debit. 

SBUX – Daily

Closing Trade

• GOOGL – 75% Loss: Buy to Close 4 Contracts (or 100% of your Contracts) Dec 1st $136/$128 Put Vertical Spreads @ $5.67 Debit. DailyPlay  Portfolio: By Closing all 4 Contracts, we will be paying $2,268. We initially opened these 4 Contracts on Oct 24 @ $3.24 Credit. Our average loss, therefore, is $243 per contract. 
• AMD – 75.46% Loss: Buy to Close 3 Contracts (or 100% of your Contracts) Nov 24th $108/$98 Put Vertical Spreads @ $6.72 Debit. DailyPlay  Portfolio: By Closing all 3 Contracts, we will be paying $2,016. We initially opened these 3 Contracts on Oct 12 @ $3.83 Credit. Our average loss, therefore, is $289 per contract. 

AAPL Bearish Opening Trade Signal

View AAPL Trade

Strategy Details

Strategy: Long Put Vertical Spread

Direction: Bearish

Details: Buy to Open 5 Contracts Dec 15th $170/$155 Put Vertical Spreads @ $4.00 Debit per contract.

Total Risk: This trade has a max risk of $2,000 (5 Contracts x $400) based on a hypothetical $100,000 portfolio risking 2%. We suggest using 2% of your portfolio value and divide it by $400 to select the # contracts for your portfolio.

Trend Continuation Signal: This is a bearish trade on a stock that is in a bearish

1M/6M Trends: Bearish/Mildly Bearish

Relative Strength: 8/10

OptionsPlay Score: 147

Stop Loss: @ $2.00 Credit. (50% loss of premium paid)

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. 

Investment Rationale

Earnings season can be a challenging time to navigate, especially, when the market reacts differently to the underlying report. Despite GOOGL, META, SNAP reporting significantly stronger than expected numbers, these stock have sold off heavily. This confirms the break of the key $4220 support level on the S&P 500 and $14,500 on the Nasdaq-100. We, unfortunately, have to face two losing positions in our portfolio on GOOGL and AMD and close out the full positions before they reach their max loss. Additionally, looking at opportunities our AAPL position has started to work in our favor with the stock at risk of breaking below its key $170 support. I believe now is an opportunity to add some additional exposure to potentially play for a continuation lower. I suggest buying another 5 contracts of the Dec $170/$155 Put Vertical @ $4.00 Debit, which represents another 2% of our hypothetical $100,000 portfolio. We will move our stop loss on the put spread to around 50% of the premium paid @ $2.00 Credit.

AAPL – Daily

Closing Trade

• MSFT – 52.47% Loss: Buy to Close 2 Contracts (or 100% of your Contracts) Nov 17th $320/$340 Call Vertical Spreads @ $11.13 Debit. DailyPlay Portfolio: By Closing both Contracts, we will be paying $2,226. We initially opened these 2 Contracts on Oct 2 @ $7.30 Credit. Our average loss, therefore, is $383 per contract. 

Investment Rationale

With tech earnings rolling in, 3 of our positions reported earnings last night. MSFT, GOOGL and SNAP. Both MSFT and GOOGL unfortunately have not gone our way, while SNAP initially was up 10% overnight is now flat at the open. We will be closing MSFT at the open today and will monitor GOOGL and SNAP for potential opportunities to exit the trades with either minimal loss or a small gain. 

Closing Trade

• INDA – 47.75% Loss: Sell to Close 20 Contracts (or 100% of your Contracts) Dec 15th $44 Calls @ $0.93 Credit. DailyPlay  Portfolio: By Closing all 20 Contracts, we will receive $1,860. We initially opened these 20 Contracts on Oct 11 @ $1.63 Debit. Our average loss, therefore, is $70 per contract. 

GOOGL Bullish Opening Trade Signal

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Strategy Details

Strategy: Short Put Vertical Spread

Direction: Bullish

Details: Sell to Open 4 Contracts Dec 1st $136/$128 Put Vertical Spreads @ $3.24 Credit per contract.

Total Risk: This trade has a max risk of $1,904 (4 Contracts x $476) based on a hypothetical $100,000 portfolio risking 2%. We suggest using 2% of your portfolio value and divide it by $476 to select the # contracts for your portfolio.

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

1M/6M Trends: Bullish/Bullish

Relative Strength: 10/10

OptionsPlay Score: 98

Stop Loss: @ $6.50 Debit. (100% loss of premium paid)

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. 

Investment Rationale

Despite having a strong view that India will maintain its outperformance in the APAC region, our position timing has not worked out as well. After rolling our Oct calls to the Dec $44 call options, we are down about 50% of the premium on those new calls. As a rule of thumb, we must reduce exposure when trades are not working out as expected. I suggest that we should close out the full INDA position at this point. We will continue to hold onto a few positions going into earnings this afternoon with MSFT and SNAP reporting after today’s close. 

Alphabet reports later this week, and out of the major tech names, it’s the one that trades at a reasonable valuation. Alphabet continues to trend higher and now targets the $150 all-time highs. Additionally, GOOGL has continued to outperform its sector since the start of the 2nd half of this year and primed for a solid earnings report. Trading at 20x forward earnings, it is trading at an incredibly reasonable valuation, when you consider the 18% EPS growth that’s expected for next year. With implied vol elevated, here is an opportunity to earn yield by selling the Dec 1st $136/128 Put Vertical @ $3.24. With a hypothetical portfolio of $100,000, I recommend risking 2% of the portfolio’s value to this roll, which is 4 Contracts for a risk of $1,904. We will set a stop loss on the put spread at around 100% of the premium collected @ $6.50 Debit.

Closing Trade

• MCD – 33.63% Gain: Sell to Close 2 Contracts (or 100% of your Contracts) Dec 15th $250/$270 Call Vertical Spreads @ $10.41 Credit. DailyPlay Portfolio: By Closing both Contracts, we will receive $2,082. We initially opened these 2 Contracts on Oct 19 @ $7.79 Debit. Our average gain, therefore, is $262 per contract. 

Investment Rationale

As treasuries continue to selloff aggressively, bears have taken control of the equity markets last week. With the $4220 major support level on the S&P at risk of falling this week, we evaluate our current open positions. We currently have 2 earnings plays this week with MSFT and SNAP on Tuesday after the close and 9 open positions. While I anticipate adding more earnings plays this week, I think it’s time to consider reducing some of the exposure in our portfolio. Our MCD position that we opened last week has seen a strong bounce, but momentum has stalled and at risk of pulling back. Despite not reaching our $268, I believe we must take profits on this trade after adding further exposure in this in the middle of last week. We are currently monitoring META and AMZN as earnings plays and PG and UNP as possible stocks to add bearish exposure in this week.

SNAP Bearish Opening Trade Signal

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Strategy Details

Strategy: Long Put Vertical Spread

Direction: Bearish

Details: Buy to Open 38 Contracts Nov 17th $9/$7 Put Vertical Spreads @ $0.54 Debit per contract.

Total Risk: This trade has a max risk of $2,052 (38 Contracts x $54) based on a hypothetical $100,000 portfolio risking 2%. We suggest using 2% of your portfolio value and divide it by $54 to select the # contracts for your portfolio.

Counter Trend Signal: This is a bearish trade on a stock that is neutral to bullish.

1M/6M Trends: Bullish/Neutral

Relative Strength: 8/10

OptionsPlay Score:132

Stop Loss: @ $0.25 Credit. (50% loss of premium paid)

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. 

Investment Rationale

With earnings season in full swing and technology stocks starting to report next week, one opportunity I see is SNAP which reports next week on Oct 24th. It trades at a ridiculous valuation of 94x forward earnings, which was justified when SNAP was growing exponentially. However, in an environment where growth has slowed meaningfully and SNAP is barely turning a profit, it’s hard to justify these valuations unless SNAP reports a strong surprise with earnings and guidance. With options expensive, I’m looking to take a bearish position using a vertical spread. I’m going to buy the Nov $9/7 Put Vertical @ $0.54 Debit. With a hypothetical portfolio of $100,000, I recommend risking 2% of the portfolio’s value to this roll, which is 38 Contracts for a risk of $2,052. We will set a stop loss on the put spread at around 50% of the premium paid @ $0.25 Credit.

SNAP – Daily