Closing Trade

• TLT – 66.94% Gain: Buy to Close 11 Contracts (or 100% of your Contracts) Jan 19th $95/$92 Put Vertical Spreads @ $0.41 Debit. DailyPlay Portfolio: By Closing all 11 Contracts, we will be paying $451. We initially opened these 11 Contracts on Dec 13 @ $1.24 Credit. Our average gain, therefore, is $83 per contract. 

JNJ Bullish Opening Trade Signal

View JNJ Trade

Strategy Details

Strategy: Long Call

Direction: Bullish

Details: Buy to Open 3 Contracts Feb 16th $155 Calls @ $6.15 Debit per contract.

Total Risk: This trade has a max risk of $1,845 (3 Contracts x $615) based on a hypothetical $100,000 portfolio risking 2%. We suggest using 2% of your portfolio value and divide it by $615 to select the # contracts for your portfolio.

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

1M/6M Trends: Bullish/Neutral

Relative Strength: 4/10

OptionsPlay Score: 88

Stop Loss: @ $3.08 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 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

As we end the week, we will be closing our TLT position that was opened a few days ago after the price has rallied significantly after the Fed meeting. TLT has now closed in on our price target of $100 and while we maintain our bullish thesis, we will be waiting for any pullbacks for additional long entries. 

Our bullish DailyPlay today is Johnson & Johnson ($JNJ). Price is showing signs of capitulation as momentum swings positive. Additionally, JNJ has experienced a pullback to the low $150s and has found support which provides an excellent risk/reward long position. We will be targeting the Feb monthly contract and the trade structure is a long call as we expect a sharp bullish move. This allows for plenty of upside as the next resistance level sits at the $170 area. 

We will look to Buy the Feb 16th $155 Call @ $6.15 Debit. With a hypothetical portfolio of $100,000, we recommend risking 2% of the portfolio’s value to this trade, which is 3 Contracts for a risk of $1,845. We will set a stop loss on the spread at around 50% loss of the premium paid @ $3.08 Credit.

JNJ – Daily

Closing Trade

• KRE – 91.43% Loss: Buy to Close 10 Contracts (or 100% of your Contracts) Jan 19th $48/$51 Call Vertical Spreads @ $2.01 Debit. DailyPlay Portfolio: By Closing all 10 Contracts, we will be paying $2,010. We initially opened these 10 Contracts on Dec 7 @  $1.11 Credit. Our average loss, therefore, is $90 per contract. 

Investment Rationale

With positive news coming from the Federal Reserve Bank yesterday, KRE broke above resistance at $49 – $50. The Fed indicated that rate cuts are on the table for next year, which caused equities to rally. We will therefore cut our loss on KRE and continue to monitor the market for further opportunities in the direction of the overall market trend.

TLT Bullish Opening Trade Signal

View TLT Trade

Strategy Details

Strategy: Short Put Vertical Spread

Direction: Bullish

Details: Sell to Open 11 Contracts Jan 19th $95/$92 Put Vertical Spreads @ $1.24 Credit per contract.

Total Risk: This trade has a max risk of $1,936 (11 Contracts x $176) based on a hypothetical $100,000 portfolio risking 2%. We suggest using 2% of your portfolio value and divide it by $176 to select the # contracts for your portfolio.

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

1M/6M Trends: Bullish/Mildly Bullish

Relative Strength: 4/10

OptionsPlay Score: 100

Stop Loss: @ $2.48 Debit. (100% loss on premium received)

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 DailyPlay for today is a bullish position on the Ishares 20+ Year Treasury Bond ETF – $TLT. In recent weeks, there has been a strong shift in sentiment as price rebounded from the $83 level with a significant uptick in momentum. After a minor pullback last week, the risk/reward favors the upside with the next resistance level at $100. As $TLT has a inverse correlation to yields, with yields moving lower, we believe there is upside potential in TLT in the short term. However, we will be monitoring Jerome Powell’s speech for any clues regarding the trajectory of interest rate cuts next year in order to maintain our bullish thesis on this ETF. 

We will look to Sell the Jan 19th $95/$92 Put Vertical Spread @ $1.24 Credit. With a hypothetical portfolio of $100,000, we recommend risking 2% of the portfolio’s value to this trade, which is 11 Contracts for a risk of $1,936. We will set a stop loss on the spread at around 100% loss to the value of the premium received @ $2.48 Debit.

TLT – Daily

Closing Trade

• ACN – 37.67% Loss: Buy to Close 1 Contract (or 100% of your Contracts) Jan 19th $335/$355 Call Vertical Spread @ $10.05 Debit. DailyPlay Portfolio: By Closing this Contract, we will pay $1,050. We initially opened this  Contract on Nov 29 @ $7.30 Credit. Our loss, therefore, is $275. 

CSCO Bullish Opening Trade Signal

View CSCO Trade

Strategy Details

Strategy: Long Call

Direction: Bullish

Details: Buy to Open 8 Contracts Jan 19th $47.50 Calls @ $2.29 Debit per contract.

Total Risk: This trade has a max risk of $1,832 (8 Contracts x $229) based on a hypothetical $100,000 portfolio risking 2%. We suggest using 2% of your portfolio value and divide it by $229 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: Neutral/Bearish

Relative Strength: 3/10

OptionsPlay Score: 93

Stop Loss: @ $1.15 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

After CSCO’s recent gap lower, price has found support near the $47 area and has recently made a move higher. This provides an opportunity to add to our existing CSCO trade to take advantage of a potential gap fill back to the $52 area. As such, we will be adding another 2% of the Jan 19th $$47.5 calls. We will also be closing our ACN trade early as yesterday’s price action saw a large move to the upside breaking above the $340 level and thus, invalidating our thesis for the trade. We will continue to monitor our DailyPlay positions carefully as this week has both a CPI data release as well as a Fed meeting which is expected to add significant volatility to markets. 

We will look to Buy the Jan 19th $47.50 Call @ $2.29 Debit. With a hypothetical portfolio of $100,000, we recommend risking 2% of the portfolio’s value to this trade, which is 8 Contracts for a risk of $1,832. We will set a stop loss on the Call at around 50% of the premium paid @ $1.15 Credit.

CSCO – Daily

Closing Trade

• MGM – 43.40% Loss: Buy to Close 10 Contracts (or 100% of your Contracts) Dec 29th $40/$43 Call Vertical Spreads @ $1.52 Debit. DailyPlay Portfolio: By Closing all 10 Contracts, we will pay $1,520. We initially opened these 10 Contracts on Nov 21 @ $1.20 Credit. Our average loss, therefore, is $32 per contract. 

ROKU Bullish Opening Trade Signal

View ROKU Trade

Strategy Details

Strategy: Short Put Vertical Spread

Direction: Bullish

Details: Sell to Open 3 Contracts Jan 26th $106/$593 Put Vertical Spreads @ $5.53 Credit per contract.

Total Risk: This trade has a max risk of $2,241 (3 Contracts x $747) based on a hypothetical $100,000 portfolio risking 2%. We suggest using 2% of your portfolio value and divide it by $747 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: 10/10

OptionsPlay Score: 92

Stop Loss: @ $11.06 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 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 tech stocks continue to outperform as the relative momentum starts to return to the Technology Sector. As such, ROKU broke out above a key price of $100. This was followed by a bounce higher which now confirms $100 as support for further upside.

We will look to Sell the Jan 26th $106/93 Put Vertical @ $5.53 Credit. With a hypothetical portfolio of $100,000, we recommend risking 2% of the portfolio’s value to this trade, which is 3 Contracts for a risk of $2,241. We will set a stop loss on the put spread at around 100% of the premium paid @ $11.06 Debit.

ROKU – Daily

Today is the release of the Non-Farm Payrolls figure where analysts’ expectations sit at 180K. Last month saw a downside surprise which had provided a tailwind for equities to rally through November. Another figure below expectations could very well prove to be the catalyst for a continuation of the rally that has slowed down in recent weeks. Next week’s Fed meeting will also be closely followed as Jerome Powell is expected to provide more clues regarding interest rate trajectory. Fed futures are pricing in a 97% probability that rates stay the same next week, which has been largely priced into markets already. Markets are pricing in a rate cut in March 2024, which depending on the data, and next week’s Fed meeting, could be brought forward if the Fed believes inflation is declining better than expected. This will provide an additional boost to equities.

Due to the jobs data being released today and the Fed meeting next week, we will be holding off on adding new positions. The current DailyPlay portfolio is well-balanced with 4 bullish, and 4 bearish setups. While our overall outlook remains bullish as the Fed pivots to a dovish tone, we will wait for additional confirmation from today’s data before entering new positions. 

Closing Trade

• HAL – 72.96% Gain: Sell to Close 29 Contracts (or 100% of your Contracts) Jan 19th $38/$34 Put Vertical Spreads @ $2.36 Credit. DailyPlay Portfolio: By Closing all 29 Contracts, we will be receiving $6,844. We initially opened 16 Contracts on Nov 13 @ $1.22 Debit, and then another 13 Contracts on Nov 13 @ $1.53 Debit. Our average gain, therefore, is $100 per contract. 

KRE Bearish Opening Trade Signal

View KRE Trade

Strategy Details

Strategy: Short Call Vertical Spread

Direction: Bearish

Details: Sell to Open 10 Contracts Jan 19th $48/$51 Call Vertical Spreads @ $1.11 Credit per contract.

Total Risk: This trade has a max risk of $1,890 (10 Contracts x $189) based on a hypothetical $100,000 portfolio risking 2%. We suggest using 2% of your portfolio value and divide it by $189 to select the # contracts for your portfolio.

Counter Trend Signal: This is a bearish trade on a stock that is bullish and overbought and, therefore expected to pull back.

1M/6M Trends: Bullish/Bullish

Relative Strength: 9/10

OptionsPlay Score: 100

Stop Loss: @ $2.22 Debit. (100% loss on premium received)

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

Another ETF that is overbought is KRE, which recently formed a double top at $49. KRE has already shown signs of exhaustion as the last two days have seen a pullback developing. As we believe that KRE will not trade higher throughout this trade, we will use this opportunity to collect a premium by selling a Credit Spread. We will collect a premium of 37% over the width of this trade, which is an excellent risk/reward ratio.

We will look to Sell the Jan 19th $48/$51 Call Vertical @ $1.11 Credit. With a hypothetical portfolio of $100,000, I recommend risking 2% of the portfolio’s value to this trade, which is 10 Contracts for a risk of $1,890. We will set a stop loss on the put spread at around 100% of the premium received @ $2.22 Debit.

KRE – Daily

ALL Bearish Opening Trade Signal

View ALL Trade

Strategy Details

Strategy: Short Call Vertical Spread

Direction: Bearish

Details: Sell to Open 6 Contracts Jan 19th $140/$145 Call Vertical Spreads @ $2.02 Credit per contract.

Total Risk: This trade has a max risk of $1,788 (6 Contracts x $298) based on a hypothetical $100,000 portfolio risking 2%. We suggest using 2% of your portfolio value and divide it by $298 to select the # contracts for your portfolio.

Counter Trend Signal: This is a bearish trade on a stock that is bullish and overbought and, therefore expected to pull back.

1M/6M Trends: Bullish/Bullish

Relative Strength: 10/10

OptionsPlay Score: 104

Stop Loss: @ $4.04 Debit. (100% loss on premium received)

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

As equities continued to rally over the last few weeks, we saw The Allstate Corporation (ALL) following suit and is now trading at a major area of resistance of around $140. With a five-week bullish run, the S&P500 has also entered an overbought condition as it formed a double top at 4,600. With a pullback developing, we expect to see overbought equities to follow, of which ALL is one. 

We will look to Sell the Jan 19th $140/145 Call Vertical @ $2.02 Credit. With a hypothetical portfolio of $100,000, I recommend risking 2% of the portfolio’s value to this trade, which is 6 Contracts for a risk of $1,788. We will set a stop loss on the put spread at around 100% of the premium received @ $4.04 Debit.

ALL – Daily

Closing Trade

• FDX – 64.37% Loss: Sell to Close 4 Contracts (or 100% of your Contracts) Jan 19th $240/$220 Put Vertical Spreads @ $1.86 Credit. DailyPlay Portfolio: By Closing all 4 Contracts, we will receive $744. We initially opened these 4 Contracts on Nov 6 @ $5.18 Debit. Our average loss, therefore, is $332 per contract. 

Investment Rationale

As equities continued to rally, FDX hit our stop loss level of 50% loss to the premium paid. As such, we will close this position and continue to monitor the market for other opportunities. As the S&P500 has hit a major area of resistance, we will see if a pullback to lower levels will open up new trading opportunities.

BMY Bullish Opening Trade Signal

View BMY Trade

Strategy Details

Strategy: Long Call Vertical Spread

Direction: Bullish

Details: Buy to Open 14 Contracts Jan 19th $50/$55 Call Vertical Spreads @ $1.44 Debit per contract.

Total Risk: This trade has a max risk of $2,016 (14 Contracts x $144) based on a hypothetical $100,000 portfolio risking 2%. We suggest using 2% of your portfolio value and divide it by $144 to select the # contracts for your portfolio.

Counter Trend Signal: This is a bullish trade on a stock that is

1M/6M Trends: Bearish/Bearish

Relative Strength: 2/10

OptionsPlay Score: 121

Stop Loss: @ $0.72 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 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 BMY trade has started to break higher and is currently at about 10% gains. With our bullish thesis proving to be correct, we will add another 2% risk to this trade.

We will look to Buy the Jan 19th $50/55 Call Vertical @ $1.44 Debit. With a hypothetical portfolio of $100,000, I recommend risking 2% of the portfolio’s value to this trade, which is 14 Contracts for a risk of $2,016. We will set a stop loss on the put spread at around 50% of the premium paid @ $0.72 Credit.

BMY – Daily