Closing Trade

• AXP – 41.05% Loss: Sell to Close 3 Contracts (or 100% of your Contracts) Aug 18th $170/$185 Call Vertical Spreads @ $4.05 Credit. DailyPlay Portfolio: By Closing all 4 Contracts, we will receive $1,215. Our average loss per contract is therefore $282.

TMUS Bullish Opening Trade Signal

View TMUS Trade

Strategy Details

Strategy: Long Call Vertical Spread

Direction: Bullish

Details: Buy to Open 4 Contracts Sept 15th $140/$155 Call Vertical Spreads @ $4.98 Debit per contract.

Total Risk: This trade has a max risk of $1,992 (4 Contracts x $498) based on a hypothetical $100,000 portfolio risking 2%. We suggest using 2% of your portfolio value and divide it by $498 to select the # shares for your portfolio.

Trend Continuation Signal: This stock has been bullish and recently broke above a key level.

1M/6M Trends: Bullish/Neutral

Technical Score: 4/10

OptionsPlay Score: 115

Stop Loss: @ $2.49 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 I write today’s DailyPlay, I wanted to remind readers that our goal is to help you grow your account by instilling strategies that lead to profitability. We do this by firstly ensuring that we don’t blow up our account by continuously cutting losing positions quickly and focusing our efforts on adding exposure in positions that are working to hit home runs. While this may sound simple, managing your emotions as you implement this is far from simple. This is what separates profitable traders from those who struggle with handling the uncomfortable. It’s incredibly difficult to accept lots of small losses while fighting the urge to take profits on your winning positions. It’s important to remember and understand that the road to profitability if filled with a lot of small losers balanced by far fewer big wins. With this in mind, we are closing our 3 Contracts of AXP where earnings did not move in the expected direction at a small loss and adding to our TMUS position that is working. Buy to Open 4 Contracts TMUS Sept $140/155 Call Vertical @ $4.98 Debit.

TMUS  – Daily

WHR Bearish Opening Trade Signal

View WHR Trade

Strategy Details

Strategy: Long Put

Direction: Bearish

Details: Buy to Open 4 Contracts Aug 11th $149 Put @ $4.65 Debit per contract.

Total Risk: This trade has a max risk of $1,860 (4 Contracts x $465) based on a hypothetical $100,000 portfolio risking 2%. We suggest using 2% of your portfolio value and divide it by $465 to select the # shares for your portfolio.

Counter Trend Signal: This stock has been bullish but broke below an uptrend channel.

1M/6M Trends: Bullish/Bullish

Technical Score: 7/10

OptionsPlay Score: 87

Stop Loss: @ $2.33 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

After closing out 2 of our earnings play yesterday for a profit, let’s look at other opportunities for next week. During our Earnings Education session, we reviewed metrics that showed the average beats rising less than 1% higher, but misses declined by more than 5% on average. With this data, we prefer to seek bearish opportunities this earnings season. Reviewing the OptionsPlay’s Earnings Calendar we see WHR reports after the close on Monday. WHR recently rallied up to its key $160 resistance level and failed to break higher. Moreover, its relative chart to the consumer discretionary sector is poor and trading near 52-week lows, suggesting potential weakness ahead. And Electrolux’s earnings announcement yesterday sent the stock down 20%, warning us of significant weakness from consumer appliance purchases. With CPI appliance prices lower in Q2 by 10%, we expect both revenue and margin compression from companies such as WHR. To take advantage of a potential move lower we are using a simple put option to capture significant downside. Buy to Open Aug 11 $149 Puts for $4.65 Debit. With a hypothetical portfolio of $100,000 we recommend risking 2% of it on this trade, which is 4 Contracts for $1,860 in total risk. Set a stop loss on the put at 50% of the premium paid, about $2.30 Credit. 

WHR  – Daily

Closing Trade

• KRE – 91.57% Loss: Buy to Close 8 Contracts (or 100% of your Contracts) Aug 18th $40/$44 Call Vertical Spreads @ $3.41 Debit. DailyPlay Portfolio: By Closing all 8 Contracts, we will be paying $2,728.

Current DailyPlay Positions

Investment Rationale

With earnings season in full swing, we have a number of open positions that report earnings this week and next. As we wait for those results, we must keep our eyes on positions that are not working out. Out of the 7 positions, KRE has surprised to the upside, turning positive despite an inverted yield curve and triggered our stop loss levels. As a reminder, our DailyPlay process is designed to help you instill the discipline of a profitable trader. Despite showing strong gains on a few positions, we must maintain our exposure in those winning positions, while cutting losers when they are still small. It’s tough to fight the urge to take profits on our winners and keep our losers open and hope that they “come back”. But that is the counterintuitive nature of profitable trading. So we are going to close out our entire 8 Contracts of KRE Aug $40/$44 Call Vertical @ $3.40 Debit. 

IBM Bullish Opening Trade Signal

View IBM Trade

Strategy Details

Strategy: Long Call Vertical Spread

Direction: Bullish

Details: Buy to Open 8 Contracts Aug 18th $135/$145 Call Vertical Spreads @ $2.56 Debit per contract.

Total Risk: This trade has a max risk of $2,048 (8 Contracts x $256) based on a hypothetical $100,000 portfolio risking 2%. We suggest using 2% of your portfolio value and divide it by $256 to select the # shares for your portfolio.

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

1M/6M Trends: Bullish/Bullish

Technical Score: 4/10

OptionsPlay Score: 126

Stop Loss: @ $1.28 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 ramp up earnings season with equities in a full bullish setup and tech overextended, opportunities to enter AI stocks with decent risk/rewards are rare. However, IBM reports this week on Wednesday (PM) and trades at both a reasonable valuation and price with upside potential. IBM’s poor relative performance is a reflection of its failure to capture recent cloud computing trends, but its AI and cloud products are starting to show signs of catching up. Earnings this week could be the catalyst for IBM to start trading closer to the valuations of its faster growing peers. It currently trades at 14.3x forward earnings, which is a massive 40% discount to its group and represents the upside. With IV Rank currently sitting at 35%, options aren’t inexpensive, so I’m inclined to buy an OTM call spread. Buy to Open the Aug $135/145 Call Vertical @ $2.56 Debit. With a hypothetical portfolio of $100,000 we recommend risking 2% of it on this trade, which is 8 Contracts for $2,050 in total risk. Set a stop loss on the vertical spread at 50% of the premium paid, about $1.25 Credit. 

IBM  – Daily

LVS Bearish Opening Trade Signal

View LVS Trade

Strategy Details

Strategy: Long Put

Direction: Bearish

Details: Buy to Open 14 Contracts Aug 18th $58 Puts @ $1.40 Debit per contract.

Total Risk: This trade has a max risk of $1,960 (14 Contracts x $140) based on a hypothetical $100,000 portfolio risking 2%. We suggest using 2% of your portfolio value and divide it by $140 to select the # shares for your portfolio.

Counter Trend Signal: This stock has been bullish but is expected to trade lower with a top of around $60 in place.

1M/6M Trends: Bullish/Bullish

Technical Score: 8/10

OptionsPlay Score: 67

Stop Loss: @ $0.70 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

With last week’s important CPI print and upbeat earnings pushing markets above their double-top resistance, all signs seem to be positive. However, as markets grind higher, we start to see opportunities where the risk/reward favors bearish exposure. One opportunity that I see is LVS with upcoming earnings on Wednesday after the close. LVS has rallied over 80% since Oct and since the beginning of the year has been forming a head & shoulders formation, which suggests that rally is at risk of a pullback. Currently trading at nearly 31x forward earnings, its priced based on the optimism of China’s reopening. LVS has exposure primarily in to Singapore and Macau and economic data out of China continues to disappoint over the past few months, suggesting soft travel demand to these destinations. My hunch is that guidance for LVS may come in light and become a catalyst for LVS to trade back down toward its $54 neckline. Look to buy an Aug 25 $58 Put @ $1.40 Debit with a stop loss at $0.70. 

LVS  – Daily

Closing Trade

• JMP – 79.74% Gain: Sell to Close 4 Contracts (or 100% of your remaining Contracts) July 21st $140 Calls @ $9.38 Credit. DailyPlay Portfolio: By Closing the remaining 4 Contracts, we will receive $3,752. We closed 50% of this trade at 98%, resulting in an average gain of 88.87%. 

Investment Rationale

JPM reported earnings this morning beating expectations and raising forward guidance for 2023 and the stock is now trading about $3.50 higher than the close yesterday. With 1 week left to expiration it is time for us to close out this trade at the open. Sell to Close the remaining 4 contracts of the July $140 Calls for about $12.50 Credit (we will update the portfolio price after the open). This would close out our entire JPM position for a total gain of roughly $4,400 on the 8 contracts we had exposure in. This is a prime example of how adding further exposure to a position when we were confirmed with the breakout gives us the opportunity to hit home runs, gaining over 440% return on the original roughly $1,000 (with a 50% stop loss) that we risked with the original 4 contracts. 

Closing Trade

NEM – 102.53% Loss: Buy to Close 12 Contracts (or 100% of your Contracts) Aug 18th $42.50/$45 Calls @ $1.60 Debit. DailyPlay Portfolio: By Closing all 12 Contracts, we will be paying $1,920. We opened this trade @ $0.79 Credit and, resulting in an average Credit of $79 per contract. The average loss per contract is therefore $81.

AXP Bullish Opening Trade Signal

View AXP Trade

Strategy Details

Strategy: Long Call Vertical Spread

Direction: Bullish

Details: Buy to Open 3 Contracts Aug 18th $170/$185 Call Vertical Spreads @ $6.87 Debit per contract.

Total Risk: This trade has a max risk of $2,061 (3 Contracts x $687) based on a hypothetical $100,000 portfolio risking 2%. We suggest using 2% of your portfolio value and divide it by $687 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: 8/10

OptionsPlay Score: 92

Stop Loss: @ $3.44 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

Earnings seasons kick off with a bang as Delta and Pepsi beat earnings and announce upbeat guidance for 2023. Equity markets continue to trade higher in pre-markets and seems to have confirmed a break of recent double-top formation which is a very bullish signal. With this in mind, we are adjusting two of our open positions. We are going to add additional exposure to AXP and close out our NEM position. With the AXP position now up 20%, we take this opportunity to add further exposure going into its earnings next week. Buy to Open 3 Contracts (2% of our $100,000 portfolio) of the Aug $170/185 Call Vertical @ $6.87. We also need to cut losses when trades are not panning out, with NEM reaching our stop loss level of 100% of the max gain, so we are closing out the full position. 

As a reminder, our DailyPlay mandate is focused on helping you become a profitable trader. The only path to profitability is have your winners outweigh your losers. We show you how to achieve this by turning small winners into large winners while cutting losses quickly. Join me later today for our July Summit where I teach the skills to Grow Your Trading Account and how the DailyPlay provides daily examples of how to achieve this. 

Partial Closing Trade

• SBUX – 32% Loss: Sell to Close 6 Contracts Aug $100 Puts @ $3.15 Credit and Sell to Close 4 Contracts Aug 25 $100 Puts @ $3.28 Credit. 
• JPM – 98% Gain: Sell to Close 4 Contracts July $140 Call @ $8.20 Credit. 

Investment Rationale

Today’s CPI print will be pivotal with the market currently expecting the Fed to raise rates during their July meeting. With inflation expected to continue to decline, the decline is a potential catalyst for the Fed to hike only one more time before the end of the year, which would be a bullish tailwind for both equities and bonds. Viewing our positions with multiple long exposure positions that we have open, we are just a few cents from our stop loss levels on SBUX of $3.00 and may close that position today if SBUX continues to show strength. Ahead of this important CPI print it’s time to take profits on half of our JPM position that we have added to. Sell to Close 4 Contracts July $140 Calls @ $8.20 Credit and keep the other 4 contracts into earnings. 

Investment Rationale

As we head into the CPI print that everyone has eyes on due to its impact on Fed policy, we review our open positions and feel that we have enough exposure going into a potentially volatile week. I am not inclined to add any further exposure to our numerous positions, nor are any of our current positions at a point where we are ready to close. The only noted name is SBUX which has reversed back into its trading range after we added to the position when it broke below its $98 support. We will be monitoring this one for a potential close if the options on them trade for less than $3.00 each. Otherwise we are going to wait until the CPI print and the earnings this week to help us gain some clarity regarding the direction of the market. 

HLT Bullish Opening Trade Signal

View SBUX Trade

Strategy Details

Strategy: Long Call Vertical Spread

Direction: Bullish

Details: Buy to Open 3 Contracts Aug 18th $145/$160 Call Vertical Spreads @ $6.07 Debit 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 in a bullish trend and further upside is expected as it broke above a trendline.

1M/6M Trends: Bullish/Bullish

Technical Score: 9/10

OptionsPlay Score: 101

Stop Loss: @ $3.00 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

We’re heading into a big week ahead of the important CPI print the kickoff of Q2’s earnings season. Markets have been in pause awaiting data this week that could be the catalyst of either the next leg higher in equities or the start of a pullback. The bond markets have shifted its tone last week, but equities continues to play chicken with the Fed. As we review our positions, our HLT position stands out as showing early signs of promise on the back of incredible strength in the travel sector. As HLT breaks out above its trading range we want to add to this position while raising our stops. Buy 3 Contracts (another 2% of our $100,000 total portfolio value) of HLT Aug $145/$160 Call Vertical @ $6.07 Debit while raising stops on all 9 contracts up to $3.00 Credit. This skews the risk/reward in our favor, risking a total of roughly $1,200 (if stopped out) for the increased position size and a profit potential of roughly $7,800 if HLT were to close above $160 at the August expiration. 

HLT – Daily