Closing Trades

• UPS – 69.39% Gain: Buy to Close 7 Contracts (or 100% of your Contracts) Oct 20th $175/$180 Call  Vertical Spreads @ $0.60 Debit. DailyPlay Portfolio: By Closing all 7 Contracts, we will be paying $420. We initially opened this trade @ $1.96 Credit per contract. Our average gain, therefore, is $136per contract. 
• BDX – 50.51% Loss: Sell to Close 2 Contracts (or 100% of your Contracts) Dec 15th $285/$310 Call Vertical Spreads @ $4.38 Credit. DailyPlay Portfolio: By Closing all 2 Contracts, we will receive $876. We initially opened this trade @ $8.85 Debit per contract. Our average loss, therefore, is $447per contract. 

UPS Bearish Opening Trade Signal

View UPS Trade

Strategy Details

Strategy: Short Call Vertical Spread

Direction: Bearish

Details: Sell to Open 3 Contracts Oct 20th $165/$175 Call Vertical Spreads @ $3.64 Credit per contract.

Total Risk: This trade has a max risk of $1,908 (3 Contracts x $636) based on a hypothetical $100,000 portfolio risking 2%. We suggest using 2% of your portfolio value and divide it by $636 to select the # shares for your portfolio.

Trend Continuation Signal: This stock is bearish and expected to break to lower levels.

1M/6M Trends: Bearish/Bearish

Technical Score: 3/10

OptionsPlay Score: 101

Stop Loss: @ $7.25 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 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

With the S&P 500 failing at a key resistance level this week at $4550, there are growing risks that we will revisit $4340 support levels as September is seasonally a weak month. Reviewing our open positions there are a few that require managing. Firstly we should cut losses on BDX, which simply has not propelled to new all-time highs with time decay working against us. It’s reached a 50% loss and requires closing. JETS is also on watch for closing but not yet at the 50% mark so we will keep a close eye on that position. The only other position that is near stop loss that I’m choosing not to close at the moment is NFLX. It has recently set up what looks like a head & shoulders top and I’m looking for that to potentially confirm over the next few trading sessions.

UPS on the other hand has reached a take profit level and broken below a major support of $165. It is now time to roll this position by taking profits on our Oct $175/$185 Call Vertical @ $0.60 Debit and sell an Oct $165/$175 Call Vertical @ $3.64 Credit. With a hypothetical portfolio of $100,000, I recommend risking 2% of the portfolio’s value on this trade, which is 3 Contracts for a risk of $1,908. We will set a stop loss on the spread at 100% of the premium collected @ $7.25 Debit.

UPS – Daily

TXN Bearish Opening Trade Signal

View TXN Trade

Strategy Details

Strategy: Short Call Vertical Spread

Direction: Bearish

Details: Sell to Open 3 Contracts Oct 13th $170/$180 Call Vertical Spreads @ $3.96 Credit per contract.

Total Risk: This trade has a max risk of $1,821 (3 Contracts x $607) based on a hypothetical $100,000 portfolio risking 2%. We suggest using 2% of your portfolio value and divide it by $607 to select the # shares for your portfolio.

Trend Continuation Signal: This stock is neutral to bearish and expected to break lower.

1M/6M Trends: Neutral/Bearish

Technical Score: 5/10

OptionsPlay Score: 103

Stop Loss: @ $8.00 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

As semiconductors lose relative ground to the S&P 500 over the past few weeks, non-specialized fabricators such as Texas Instruments are pressured more as demand slows globally. TXN is expected to earn nearly 21% less than last year, yet continues to trade at 22x forward earnings. Additionally, semiconductors for autos remain one of the few categories where demand remains resilient, yet TXN is showing signs of losing market share to its peers ADI and NXPI. With the stock failing to break out from its $165-170 trading range alongside the rest of the market, I expect TXN to trade sideways to lower from here and warrants selling a Call Spread to potentially take advantage of this outlook. Sell Oct 13 $170/$180 Call Vertical @ $3.96 Credit. With a hypothetical portfolio of $100,000, I recommend risking 2% of the portfolio’s value on this trade, which is 3 Contracts for a risk of $1,812. We will set a stop loss on the spread at 100% of the premium collected, $8.00 Debit.

TXN – Daily

BIDU Bullish Opening Trade Signal

View BIDU Trade

Strategy Details

Strategy: Short Put Vertical Spread

Direction: Bullish

Details: Sell to Open 3 Contracts Oct 13th $144/$134 Put Vertical Spreads @ $4.25 Credit per contract.

Total Risk: This trade has a max risk of $1,725 (3 Contracts x $575) based on a hypothetical $100,000 portfolio risking 2%. We suggest using 2% of your portfolio value and divide it by $575 to select the # shares for your portfolio.

Trend Continuation Signal: This stock is bullish and expected to make new highs.

1M/6M Trends: Bullish/Bullish

Technical Score: 4/10

OptionsPlay Score: 94

Stop Loss: @ $8.00 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 the previous day’s closing price and we’re estimating that it will likely fill around $3.80 at the open.

Investment Rationale

As data out of China continues to stagnate, and the government rolls out stimulus across a wide swath of the economy, there may be contrarian opportunities in this market. The Chinese government just approved the first AI Chatbot for public consumption, and BIDU looks like an interesting setup. BIDU has spent the last nearly 2 years forming a bottoming inverse head & shoulders formation that has a neckline of $160, which would be an immediate upside target. With a breakout potential into the $220’s. While I don’t think we’re ready to get ahead of ourselves, I think now is a low-risk opportunity to acquire a small position in BIDU and see if an AI lead rally will materialize. I’m looking to sell the Oct 13 $144/$134 Put Vertical @ $4.25 Credit (I expect that this will likely trade around $3.80 at the open since BIDU is already up about 1% pre-market). With a hypothetical portfolio of $100,000, I recommend risking 2% of the portfolio’s value on this trade, which is 3 Contracts for a risk of $1,725. We will set a stop loss on the spread at 100% of the premium collected, $8.00 Debit.

BIDU – Daily

UPS Bearish Opening Trade Signal

View UPS Trade

Strategy Details

Strategy: Short Call Vertical Spread

Direction: Bearish

Details: Sell to Open 7 Contracts Oct 20th $175/$180 Call Vertical Spreads @ $2.06 Credit per contract.

Total Risk: This trade has a max risk of $2,058 (7 Contracts x $294) based on a hypothetical $100,000 portfolio risking 2%. We suggest using 2% of your portfolio value and divide it by $294 to select the # shares for your portfolio.

Trend Continuation Signal: This stock is bearish and expected to continue lower.

1M/6M Trends: Bearish/Bearish

Technical Score: 4/10

OptionsPlay Score: 108

Stop Loss: @ $4.15 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 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

As we seek new opportunities in a sideways market, one idea that has generated profits for us recently has presented a new entry opportunity. Using the Credit Spread Trade Ideas scanner on the OptionsPlay platform, UPS generated a new Bearish Call Vertical trade opportunity, collecting over 40% of the vertical width by selling the Oct $175/$180 Call Vertical @ $2.06 Credit. The small rally off the $166 lows presents another opportunity to play for another leg lower on UPS. Its recent approval to lift driver wages during times of slowing shipping volumes and increased competition from Amazon suggests the risks are to the downside. With a hypothetical portfolio of $100,000, I recommend risking 2% of the portfolio’s value on this trade, which is 7 Contracts for a risk of $2,058. We will set a stop loss on the spread at 100% of the premium collected, $4.15 Debit.

UPS – Daily

Closing Trade

• MAR – 68.81% Loss: Sell to Close 8 Contracts (or 100% of your Contracts) Sept 15th $197.50/$187.50 Put  Vertical Spreads @ $0.68 Credit. DailyPlay Portfolio: By Closing all 8 Contracts, we will receive $544. We initially opened this trade @ $2.58 Debit per contract. Our average loss, therefore, is $190 per contract. 

Investment Rationale

Market sentiment has made a 180 as the S&P 500 breaks above the key $4450 resistance level on the back of weaker JOLTs data. Bond traders have moved expectations of rate cuts forward from July to June of 2024, ahead of the Fed’s forecast and 10-year yields have responded by tumbling to 4.1%. However, I’m not confident that we’re out of the woods yet. I still believe that there are opportunities to add some downside exposure as we rally but at the moment, we have to review one of our open positions that have reached a stop loss level. MAR has rallied back above its key $200 resistance level and the options have lost more than 50% of the premium paid and it’s time to close this trade out at a loss. We have a good amount of long exposure and now only NFLX for short exposure. Depending on how markets respond this week, we will look to potentially allocate more capital to bearish exposure and start taking profits on our long positions. 

Closing Trade

• UPS – 52.69% Gain: Sell to Close 4 Contracts (or 100% of your Contracts) Sept 15th $180/$165 Put Vertical Spreads @ $9.65 Credit. DailyPlay Portfolio: By Closing all 4 Contracts, we will receive $3,860. We initially opened this trade at $6.32 Debit per contract. Our average gain, therefore, is $333 per contract. 

INDA Bullish Opening Trade Signal

View INDA Trade

Strategy Details

Strategy: Long Call

Direction: Bullish

Details: Buy to Open 12 Contracts Oct 20th $43 Calls @ $1.72 Debit per contract.

Total Risk: This trade has a max risk of $2,076 (12 Contracts x $172) based on a hypothetical $100,000 portfolio risking 2%. We suggest using 2% of your portfolio value and divide it by $172 to select the # shares for your portfolio.

Trend Continuation Signal: This stock is bullish and is expected to continue higher.

1M/6M Trends: Mildly Bullish/ Bullish

Technical Score: 9/10

OptionsPlay Score: 79

Stop Loss: @ $0.85 Credit (50% 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 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

As we see concerns out of China continue to dominate headlines and set the tone for global investors, one country that is benefiting and showing strength is India. As geopolitical tensions have shifted outsourcing capacity away from China, countries such as India and Vietnam have benefited. Looking at the INDA ETF, a breakout above its $43 resistance level and pullback to test it as support, provides an a strong risk/reward opportunity to gain upside exposure. With IV Rank at 2% and options extremely cheap, I’m going to settle for a simple call option to play for further upside in this ETF. Buy to Open Oct $43 Call @ $1.73 Debit. With a hypothetical portfolio of $100,000, I recommend risking 2% of the portfolio’s value on this trade, which is 12 Contracts for a risk of $2,076. We will set our stop loss on the entire position to 50% of the premium paid of $0.85 Credit.

Additionally, I wrote up a thesis for closing our UPS trade last week for a full profit, however, it was not published as a closing trade. So for those who may have missed this, we are closing the UPS trade this morning as virtually the same profit as last week. 

INDA – Daily

JETS Bullish Opening Trade Signal

View JETS Trade

Strategy Details

Strategy: Long Call

Direction: Bullish

Details: Buy to Open 26 Contracts Oct 20th $19 Calls @ $0.78 Debit per contract.

Total Risk: This trade has a max risk of $2,028 (26 Contracts x $78) based on a hypothetical $100,000 portfolio risking 2%. We suggest using 2% of your portfolio value and divide it by $78 to select the # shares for your portfolio.

Counter Trend Signal: This stock is bearish but is expected to bounce higher off support.

1M/6M Trends: Bearish/Bearish

Technical Score: 4/10

OptionsPlay Score: 87

Stop Loss: @ $0.35 Credit (50% 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

Despite reporting record profits across the airline industry, the JETS ETF has pulled back 16% over the past month and a half on the back of contagion out of China. However, travel demand and revenue numbers in the airlines do not reflect the steep declines. I think this is an opportunity to play for a bounce with an attractive risk/reward for long exposure. With options relatively inexpensive, I’m going to use a simple call option to play for upside. Buy Oct $19 Calls @ $0.78 Debit. With a hypothetical portfolio of $100,000, I recommend risking 2% of the portfolio’s value on this trade, which is 26 Contracts for a risk of $2,028. We will set our stop loss on the entire position to 50% of the premium paid of $0.35 Credit. 

JETS – Daily

MAR Bearish Opening Trade Signal

View MAR Trade

Strategy Details

Strategy: Long Put Vertical Spread

Direction: Bearish

Details: Buy to Open 8 Contracts Sept 15th $197.50/$187.50 Put Vertical Spread @ $2.58 Debit per contract.

Total Risk: This trade has a max risk of $2,064 (8 Contract x $258) based on a hypothetical $100,000 portfolio risking 2%. We suggest using 2% of your portfolio value and divide it by $258 to select the # shares for your portfolio.

Counter Trend Signal: This stock is neutral to bullish and is expected to break below an area of support.

1M/6M Trends: Neutral/Bullish

Technical Score: 9/10

OptionsPlay Score: 145

Stop Loss: @ $1.30 Credit (50% 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 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 consumers spending selectively, travel has held up relatively well until now, but signs of deceleration are starting to creep in. Hotel RevPAR has meaningfully slowed across US, Europe and APAC regions. With Marriott’s global exposure, I see downside risks after its recent 52-week high print from a couple of weeks ago. The bearish trade has already started to be confirmed with a break below its key $200 support yesterday. My next downside target is $190, and a break below that would target $172. Trading at 22x next year’s earnings, while expecting only 10% EPS growth is expensive and reflects the highest valuation MAR has traded for in the past 10 years. I’m looking to potentially profit from further downside by buying the Sept $197.5/187.5 Put Vertical @ $2.58 Debit. With a hypothetical portfolio of $100,000, I recommend risking 2% of the portfolio’s value on this trade, which is 8 Contracts for a risk of $2,064. We will set our stop loss on the entire position to 50% of the premium paid of $1.30 Credit. 

MAR – Daily

Closing Trade

• NVDA – 27.47% Loss: Sell to Close 1 Contract (or 100% of your Contracts) Sept 1st $445/$385 Put Vertical Spread @ $12.17 Credit. DailyPlay Portfolio: By Closing this 1 Contract, we will receive $1,217. Our loss is therefore $563 per contract. Please note that the cost basis may be slightly different when we close this position after market opening.

AMT Bullish Opening Trade Signal

View AMT Trade

Strategy Details

Strategy: Long Call Vertical Spread

Direction: Bullish

Details: Buy to Open 4 Contracts Oct 20th $180/$195 Call Vertical Spread @ $4.85 Debit per contract.

Total Risk: This trade has a max risk of $1,940 (4 Contract x $485) based on a hypothetical $100,000 portfolio risking 2%. We suggest using 2% of your portfolio value and divide it by $485 to select the # shares for your portfolio.

Counter Trend Signal: This stock is bearish and is expected to bounce higher off a trendline.

1M/6M Trends: Bearish/Bearish

Technical Score: 3/10

OptionsPlay Score: 110

Stop Loss: @ $2.40 Credit (50% 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 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

It’s always difficult to face a trade where you were incorrect in the view and the trade does not go in the direction of your outlook. That certainly was the case with NVDA. It’s common when this happens to want to hold onto the losing trade, hoping that it comes back in the direction instead of crystallizing the loss. But, facing the pain and accepting a loss is an important part of building the emotional resilience to becoming a profitable trader. As much as it hurts to take a loss the very next day on this trade, we must do so in order to keep losses limited and focus our energy and efforts on our winning positions. We will be closing out the 1 contract of NVDA put spread that we have and update the price on it after the open.

Looking ahead, I see an opportunity in AMT that recently traded to a new 52-week low. However, there are signs that the selloff is exhausted and near a trend reversal. As AMT made a newer low, momentum did not confirm that suggesting a bounce ahead is more likely. AMT’s consistent growth, high margins and a healthy 3.5% dividend yield makes it a lower risk buy near 52-week lows. I’m going to further reduce my risk by using a options strategy to play for the bounce. Buy to Open Oct $180/195 Call Vertical @ $4.85 Debit. With a hypothetical portfolio of $100,000, I recommend risking 2% of the portfolio’s value on this trade, which is 4 Contracts for a risk of $1,940. We will set our stop loss on the entire position to 50% of the premium paid of $2.40 Credit. 

AMT – Daily

NVDA Bearish Opening Trade Signal

View NVDA Trade

Strategy Details

Strategy: Long Put Vertical Spread

Direction: Bearish

Details: Buy to Open 1 Contract Sept 1st $445/$385 Put Vertical Spread @ $17.80 Debit per contract.

Total Risk: This trade has a max risk of $1,780 (1 Contract x $1780) based on a hypothetical $100,000 portfolio risking 2%. We suggest using 2% of your portfolio value and divide it by $1,780 to select the # shares for your portfolio.

Counter Trend Signal: This stock is bullish and is expected to pull back to lower levels.

1M/6M Trends: Bullish/Bullish

Technical Score: 10/10

OptionsPlay Score: 126

Stop Loss: @ $8.90 Credit (50% 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 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

My DailyPlay today will take on a higher amount of risk and is likely to be controversial with some disagreeing with my view on NVDA. NVDA reports after the close today and is expected rake in over $11b in revenue and $2.10 in EPS for the quarter. There is no doubt that NVDA is at the forefront of the AI revolution that is only in its infancy. While I believe in NVDA for the long term, there are concerns with the earnings report this quarter. There are signs from distribution partners regarding the demand of server rollouts decelerating in the previous couple of months. Also, the 10-year yield is 100bps higher compared to last quarter’s announcement, softening valuations. If we look at the chart of NVDA, it recently has failed at its $480 highs, however, I will admit that charts are not meaningful in this analysis as earnings could easily be the catalyst that breaks it higher from those levels. My overall concern is that the stock is priced to perfection after last quarter’s blowout earnings, and that we simply are trading in a different risk regime. Even if NVDA beats on earnings that doesn’t guarantee the stock breaks higher.

My trade is a short-term binary trade for earnings, that I expect to exit before the end of this week and is NOT an expression of a longer-term view on NVDA. Buy to Open Sept 1 $445/$385 Put Vertical @ $17.80. With a hypothetical portfolio of $100,000 I recommend adding another 2% of risk on this trade, which is 1 Contracts for a risk of $1,780. Due to the short-term earnings catalyst nature of this trade, we will not be setting a stop loss on this trade and manage it by tomorrow morning or Friday. 

NVDA – Daily