Closing Trade

• AAPL – 107.74% Loss: Buy to Close 6 Contracts (or 100% of your Contracts) July 28th $190/$195 Call Vertical Spreads @ $3.22 Debit. DailyPlay Portfolio: By Closing all 6 Contracts, we will pay $1,932. 

JPM Bullish Opening Trade Signal

View JPM Trade

Strategy Details

Strategy: Long Call

Direction: Bullish

Details: Buy to Open 3 Contracts July 21st $140 Calls @ $5.98 Debit per contract.

Total Risk: This trade has a max risk of $1,794 (3 Contracts x $598) based on a hypothetical $100,000 portfolio risking 2%. We suggest using 2% of your portfolio value and divide it by $598 to select the # shares for your portfolio.

Trend Continuation Signal: This stock is in a bullish trend and further upside is expected.

1M/6M Trends: Bullish/Bullish

Technical Score: 7/10

OptionsPlay Score: 99

Stop Loss: @ $2.99 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

As US equities powers higher and even broadens a bit, there is a risk-on sentiment, despite a dislocation with underlying fundamentals and economic numbers. One of our long holdings JPM has started to breakout above its recent trading range high of $144. We are taking this opportunity to add to our position for further upside and raising our stops on all contracts to the original breakeven price of $4.30. Adding 3 contracts of the July $140 Calls @ $5.98 Debit. By raising our stops an adding to a position we would risk a total of only roughly $500 for unlimited upside with a position size that is roughly 4% of our total portfolio value. 

We also need to close AAPL from our portfolio as it marches past the $3 Trillion mark and losses exceed 100% of the premium collected. 

Closing Trade

• ORCL – 59.25% Loss: Sell to Close 8 Contracts (or 100% of your Contracts) July 7th $111/$120 Call Vertical Spreads @ $1.96 Credit. DailyPlay Portfolio: By Closing all 8 Contracts, we will receive $1,568. We opened this trade @ $2.70 Debit and, resulting in an average cost of $270 per contract. The average loss per contract is therefore $141.50.

AXP Bullish Opening Trade Signal

View AXP Trade

Strategy Details

Strategy: Long Call Vertical Spread

Direction: Bullish

Details: Buy to Open 4 Contracts August 18th $170/$185 Call Vertical Spreads @ $5.05 Debit per contract. per contract.

Total Risk: This trade has a max risk of $2,016 (4 Contracts x $504) based on a hypothetical $100,000 portfolio risking 2%. We suggest using 2% of your portfolio value and divide it by $504 to select the # shares for your portfolio.

Trend Continuation Signal: This stock is in a bullish trend and is expected to continue higher over the duration of this trade.

1M/6M Trends: Bullish/Bullish

Technical Score: 8/10

OptionsPlay Score: 109

Stop Loss: @ $2.52 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

As consumers pull back with spending, they have become more selective, but travel remains one area where spending continues to rise. At the heart of this spending are with airlines and the credit card providers that benefit from this spend. American Express’s premium credit cards are the preferred card of travelers with the their Delta partnership driving nearly 1% of the US’s GDP in spending alone. AXP recently pulled back to its $165 breakout level and now provides an opportunity to buy on a pullback to an important support level. I’m looking to purchase the Aug $170/185 Call Vertical @ $5.04 Debit to play for a breakout higher. We also have been monitoring our ORCL position and it is now at risk of filling the earnings gap, so we are closing out our adjusted trade at a loss of $1,425, bringing the net gain on ORCL trade to $4,015 on the net position. 

AXP – Daily

Closing Trade

• WBA – 85.30% Loss: Sell to Close 17 Contracts (or 100% of your Contracts) July 21st $30/$35 Call Vertical Spreads @ $0.28 Credit. DailyPlay Portfolio: By Closing all 17 Contracts, we will receive $476. We opened 12 Contracts of his trade @ $1.58 Debit and another 7 Contracts @ $2.79 Debit, resulting in an average cost of $266.41 per contract. The average loss per contract is therefore $238.41.

HLT Bullish Opening Trade Signal

View HLT Trade

Strategy Details

Strategy: Long Call Vertical Spread

Direction: Bullish

Details: Buy to Open 6 Contracts August 18th $145/$160 Call Vertical Spreads @ $3.37 Debit per contract.

Total Risk: This trade has a max risk of $2,022 (6 Contracts x $337) based on a hypothetical $100,000 portfolio risking 2%. We suggest using 2% of your portfolio value and divide it by $337 to select the # shares for your portfolio.

Trend Continuation Signal: This stock has been neutral and is expected to trade higher over the duration of this trade.

1M/6M Trends: Neutral/Neutral

Technical Score: 7/10

OptionsPlay Score: 92

Stop Loss: @ $1.69 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

Our bullish trade idea today is Hilton Worldwide Holdings ($HLT). $HLT has experienced a bullish trend which started in July 2022. However, over the last few months price has started to squeeze with higher lows and lower highs being formed. With the longer-term trend being bullish, a squeeze could indicate a potential breakout higher is on the cards in the near future. Therefore, the trade structure we will be using is buying a slightly OTM call vertical to take advantage of a strong bullish move. The August 18 $145/$160 only costs $3.37 (22% of the vertical width) which provides an excellent risk/reward long opportunity. The next key resistance levels are at $150 and $160 respectively which will also act as price targets for $HLT.

Partial Closing Trade

• QQQ – 66.29% Gain: Sell to Close 2 Contracts (or 2/3 of your Contracts) July 3rd $365 Puts @ $7.35 Credit. DailyPlay Portfolio: By Closing 2 of the 3 Contracts, we will receive $1,470.

Investment Rationale

Yesterday we saw a sizable shift in the bond market’s expectations of Fed policy for the rest of 2023. Bond swaps are now only pricing in 1 rate cut for the rest of 2023, shifting from the 2 cuts expected last week. Despite this there remains a large gap between the bond markets and what the Fed has continued to communicate with 2 more rate hikes expected this year. The 1.4% decline in the Nasdaq-100 yesterday reflects this change in sentiment as tech leads the selloff and the Equal Weight S&P 500 gains nearly 0.6%. This improves the market breadth marginally but remains challenging for equities overall. We are taking this opportunity to take partial profits on our QQQ portfolio hedge, and close 2 out of 3 contracts. We are also watching our ORCL position closely as it is around our 50% stop loss threshold and may close during this week’s trading session.

QQQ – Daily

KRE Bearish Opening Trade Signal

View KRE Trade

Strategy Details

Strategy: Short Call Vertical Spread

Direction: Bearish

Details: Sell to Open 8 Contracts Aug 18th $40/$44 Calls @ $1.51 Credit per contract.

Total Risk: This trade has a max risk of $1,992 (8 Contracts x $249) based on a hypothetical $100,000 portfolio risking 2%. We suggest using 2% of your portfolio value and divide it by $249 to select the # shares for your portfolio.

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

1M/6M Trends: Bearish/Bearish

Technical Score: 2/10

OptionsPlay Score: 104

Stop Loss: @ $3.02 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

Our bearish trade idea today is the Regional Banks ETF (KRE). KRE has underperformed relative to the Financial sector (XLF) due to concerns that smaller banks may be more vulnerable to the stress tests from the Fed, especially after the banking turmoil earlier this year. We have seen price action turn bearish after a small recovery and this provides an excellent opportunity to sell a call credit spread that collects roughly 37% of the vertical width. Our downside target will be the $34 – $35 area which also acted as the previous swing low. Therefore, we will be selling the August 18 $40/$44 call spread collecting $1.51 to gain neutral/bearish exposure on KRE. 

Closing Trade

• BA – 62.62% Loss: Sell to Close 3 Contracts (or 100% of your Contracts) Aug 18th $225/$250 Call Vertical Spreads @ $2.68 Credit. DailyPlay Portfolio: By Closing all 3 Contracts, we will receive $804. We opened this trade at $7.42 Debit, resulting in a cost of $742 per contract. The average loss per contract is therefore $474.

SBUX Bearish Opening Trade Signal

View SBUX Trade

Strategy Details

Strategy: Long Put

Direction: Bearish

Details: Buy to Open 6 Contracts Aug 18th $100 Puts @ $3.20 Debit per contract.

Total Risk: This trade has a max risk of $1,920 (6 Contracts x $320) based on a hypothetical $100,000 portfolio risking 2%. We suggest using 2% of your portfolio value and divide it by $320 to select the # shares for your portfolio.

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

1M/6M Trends: Neutral/Mildly Bearish

Technical Score: 5/10

OptionsPlay Score: 85

Stop Loss: @ $1.60 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

Despite the Nasdaq-100 continuing to shrug off the risk of higher interest rates, the rest of the market has weakened considerably over the past 2 trading sessions. Market breadth has declined with more than 50% of all stocks trading below their 200D SMA as of yesterday. With this erosion, we are looking to add short exposure to our DailyPlay portfolio while cutting long exposure in BA. After breaking down below its $104 support level, SBUX has rallied over the past few weeks and presents an opportunity with favorable risk/reward to add some short exposure. Currently trading at over 29x forward earnings, SBUX is priced for strong EPS growth, but as consumers become more selective in their spending, there are downside risks to these high expectations. With IV Rank at 0%, I am seeking downside exposure using a simple Aug $100 Put @ $3.20 Debit, risking only 3.2% of the stock’s value for unlimited downside exposure. Additionally, BA has failed to sustain its breakout and reached a stop loss level and it is time to cut losses by closing out the entire position. 

SBUX – Daily

As a reminder, the goal of our DailyPlay signals is to show you how to manage your portfolio for profitability. During choppy markets, it is most important to cut your losers very quickly but remain confident in opening new positions and opportunities. This is why we have been aggressively cutting losses these past few days and focusing on adjusting winning positions to offset our losses. 

Closing Trade

• GOOGL – 62.09% Loss: Sell to Close 5 Contracts (or 100% of your Contracts) July 21st $125/$135 Call Vertical Spreads @ $1.49 Credit. DailyPlay Portfolio: By Closing all 5 Contracts, we will receive $745. By Closing all 5 Contracts, we will receive $745. We opened this trade at $3.93 Debit, resulting in a cost of $393 per contract. The average loss per contract is therefore $244.

Investment Rationale

Chairman Powell’s testimony did spook certain sectors of the markets with tech leading the move lower by nearly 1.5%. We will maintain our short-dated hedge with QQQ going into the end of this week and see how markets digest today’s testimony. With the VIX touching a new post-COVID low, my hunch is that markets will continue to shake this off and see a slow grind higher. Despite that, our adjustment trade on GOOGL has reached its stop loss level and it’s time to cut our losses. We’re closing out the remaining open contracts on GOOGL.

QQQ Bearish Opening Trade Signal

View QQQ Trade

Strategy Details

Strategy: Long Put

Direction: Bearish

Details: Buy to Open 3 Contracts July 3rd $365 Puts @ $3.76 Debit per contract.

Total Risk: This trade has a max risk of $1,128 (3 Contracts x $376) based on a hypothetical $100,000 portfolio risking 2%. We suggest using 1% of your portfolio value and divide it by $376 to select the # shares for your portfolio.

Counter Trend Signal: This stock has been bullish but traded into an area of resistance and is expected to pull back lower.

1M/6M Trends: Bullish/Bullish

Technical Score: 9/10

OptionsPlay Score: 85

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

Chairman Powell will testify in Washington today and this presents a risk to the markets that have shrugged off the idea of further rate hikes. With a resilient housing market and strong labor market, there is reason to believe that the Fed is comfortable with further rate hikes to bring inflation back to its 2% mandated target. Tech stocks are at the most risk of a pullback if the market is spooked by Chairman Powell’s testimony today and tomorrow. In my opinion, this is not enough of a reason to remove tech stocks from a portfolio or to take a bearish position, but it is prudent to consider buying some short-dated protection. With QQQ tagging the $370 resistance level, a potential reversal level, I advocate allocating 1% of our portfolio value to buy short-dated QQQ puts while volatility is low. If these next 2 days end up being a non-event, we can simply close out the trade by the end of this week. Buy 3 Contracts of the July 3 $365 Puts @ $3.76 Debit. 

QQQ – Daily

WBA Bullish Opening Trade Signal

View WBA Trade

Strategy Details

Strategy: Long Call Vertical Spread

Direction: Bullish

Details: Buy to Open 7 Contracts July 21st $30/$35 Call Vertical Spreads @ $2.79 Debit per contract.

Total Risk: This trade has a max risk of $1,953 (7 Contracts x $279) based on a hypothetical $100,000 portfolio risking 2%. We suggest using 2% of your portfolio value and divide it by $279 to select the # shares for your portfolio.

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

1M/6M Trends: Bullish/Neutral

Technical Score: 2/10

OptionsPlay Score: 67

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

We head into a week that has investors both optimistic and concerned about the parallels to the 1999 tech lead rally. With the Nasdaq-100 touching $15250 resistance last week, all eyes are on Chairman Powell’s testimony on Wednesday and Thursday. Hints at further hikes could pour cold water on the rally. Overall, market breadth has continued to improve and provides confidence in the state of the current rally. Moreover, the AI stocks leading the market higher have little in common to the unprofitable, zero-revenue-driven hype from 1999. I believe that for investors concerned about the rally it’s better to take a neutral tone rather than outright bearish in the face of such strong bullish momentum. Looking at our DailyPlay portfolio, we have an opportunity to add to a winning position and raise our stops in WBA. We have confirmed the $30 lows and broken out above the $32 congestion zone on strong volume. We are now looking to ride this trend to our $35 target. I’m looking to commit another 2% of our overall portfolio to buy 7 more contracts of the July $30/35 Call Vertical @ $2.79 Debit and raise stops to our original breakeven price of $1.50. If we are successful in this adjustment, we can realize a maximum profit of $5,747 while losing only $903 if we are stopped out on all 19 contracts. 

This is a reminder of our DailyPlay mandate, which is focused on helping you become a profitable trader. The only path to profitability is to have your winners be larger than the losers. We show you how to achieve this by turning small winners into large winners while cutting losses quickly. 

WBA – Daily

AAPL Bearish Opening Trade Signal

View AAPL Trade

Strategy Details

Strategy: Short Call Vertical Spread

Direction: Bearish

Details: Sell to Open 6 Contracts July 28th $190/$195 Call Vertical Spreads @ $1.78 Credit per contract

Total Risk: This trade has a max risk of $1,932 (6 Contracts x $322) based on a hypothetical $100,000 portfolio risking 2%. We suggest using 2% of your portfolio value and divide it by $322 to select the # shares for your portfolio.

Counter Trend Signal: This stock is currently bullish but generated a counter-trend sell signal, therefore we expect this stock to not continue higher over the duration of this trade.

1M/6M Trends: Bullish/Bullish

Technical Score: 9/10

OptionsPlay Score: 103

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 market is starting to play chicken again with the Fed again. Equity markets have now completely shrugged off the idea of further rate hikes, pricing in the exact opposite, rate cuts. The 2y-10y treasury yield curve has inverted further towards -100bps, suggesting concerns of a hard landing and AI tech stocks have hit a new all-time high. Despite being overbought by most measures, momentum continues to push equities higher as the fear of missing out has taken over the markets. Our portfolio is currently positioned with all bullish positions given the current market trends, however I currently advocate adding neutral positions given the stretched nature of the current market rally of over 16% in the past 3 months, betting on a pause or consolidation.

I’m looking at AAPL, which has generated a counter-trend sell signal on both the daily and weekly timeframes. After a 50% rally since Oct and now trading at 28x forward earnings, despite only expecting about 9% EPS growth for next year, it looks stretched. However, keep in mind that doesn’t mean it can’t get more stretched and trade at even higher valuations. Which is why I’m taking a neutral tone with a bit of room by selling an OTM call vertical and limited risk. I’m selling the July 28 $190/$195 Call Vertical @ $1.78 Credit.