Taking Profits

• MTCH: 108.57% Gain: Sell to close May 20, 2022 $105/$95 Put Vertical @ $6.57 Credit. As I write this after 1 AM ET early Wednesday morning, S&P futures are down ~20 points suggesting a lower open later this morning. Let’s take advantage of that weakness to exit the remaining position we have on in the Long MTCH May 20th $105/$95 put spread. (We took the first half off on April 6th when MTCH traded beneath $95, the hedge strike price,) The spread closed on Tuesday at about $6.60, and it should be worth a bit more than that if we get a lower open. The average gain on this trade was 105.87% and the average cost basis to exit this trade is $6.49 credit. DailyPlay Portfolio: By closing 3 contracts, we will be receiving $1,971. 

View SYY Trade

Strategy Details

Strategy & Direction: Short Call Spread – Bearish

Details: Sell 8 May 6 $90/$86 Call Vertical @ $1.65 Credit

Total Risk: This trade has a max risk of $1,880 (8 contracts x $235 per contract). 

Counter Trend Signal: This is a bearish strategy on a stock or ETF that is experiencing a bullish trend.

1M/6M Trends: Bullish/Bullish

Technical Score: 9/10

OptionsPlay Score: 109

Learn how to size this trade for your portfolio size

Entering the Trade

Use the following details to enter the trade on your trading platform. Please note that if there is a multi-leg option strategy, it should be entered as a single trade.

Investment Rationale

Yesterday did little to help us figure out if last Tuesday’s SPX Setup -9 count is going to lead to a rally, or not. The market can really go either way right now, and I don’t have high conviction either way, or at least, not yet. So, I am more apt to do nothing right now or play for a near-term option play with a name like Sysco Corp. (SYY) that reports quarterly earnings in just two weeks and is up against resistance and has some upside exhaustion signals that have just appeared.

The weekly chart shows a line (in green) connecting prior all-time highs coming in just above the current price.

The daily chart shows an Aggressive Sequential +13 signal from last Thursday and then a likely Setup +9 today.  Thus, this may stall here and meander into earnings on May 3. 

As such, we’ll look to sell a SYY May 6th $86/$90 call spread for $1.65, having us take in a credit that is about 41% of the spread differential based upon yesterday’s closing mid prices.  Be aware that this trade idea likely turns into an all or none type proposition, meaning we will either make the full $1.65 credit or lose the max $2.35 we can.

 Partial Closing Trades

• UNH: 28.44% Loss: Sell to close May 20, 2022 $570/$540 Call Vertical @ $8.68 Credit. Thursday made a new high and immediately sold off hard. Given no progress in price since we’ve put this on, we’re taking off half today. As of last Thursday’s close, we were down 28% on this trade. DailyPlay Portfolio: By closing 1 contract of this trade, we will receive $868. 

Closing Trades

• CL: 171.43% Gain: Sell to close Apr 29, 2022 $78/$74 Call Vertical @ $3.80 Credit. With this stalling the past few days at a 62% retracement level up to the early-January high, we’re going to exit this trade. Based upon Friday’s mid-price close of the spread, we were up 171%. We’ll sell out today. Therefore, the average gain on this trade was 125.72% and the average cost basis to exit this trade is $3.16 credit. DailyPlay Portfolio: As we are closing 7 contracts of this trade, we will receive $2660. 

• XBI: 44.15% Loss: Sell to close Apr 22, 2022 $88.5/$95 Call Vertical @ $1.48 Credit. I don’t like the price action, and we’ll exit today before this trades much lower than the bottom strike price. As of Thursday’s close, we were down 43%. Therefore, the average loss on this trade was -15.68% and the average cost basis to exit this trade is $2.24 credit. DailyPlay Portfolio: As we are closing 4 contracts of this trade, we will receive $896. 

View NKE Trade

Closing Trades

• CC: 34.31% Loss:  Sell to close May 6, 2022 $29/$32 Put Vertical @ $0.67 Credit. Yesterday morning we covered half of our CC long put spread, and said that any subsequent close above $33.32 would have us exit the rest. It closed at $33.44 yesterday, and thus, I have no reason to hold this short, so we will cover the remainder of our long May 6th $29/$32 put spread this morning. The average loss on this trade was 24.05% and the average cost basis to exit this trade is $0.64 credit.

NKE Bullish Opening Trade Signal

Strategy Details

Strategy: Call Debit Spread

Strategy Direction: Bullish

Details: Buy May 27 $128/$140 Call Vertical @ $3.81 Debit

Counter Trend Signal: This is a bullish strategy on a stock or ETF that is experiencing a bearish trend.

1M/6M Trends: Bearish/Bearish

Technical Score: 4/10

OptionsPlay Score: 91

Entering the Trade

Use the following details to enter the trade on your trading platform. Please note that if there is a multi-leg option strategy, it should be entered as a single trade.

Investment Rationale

Monday and Tuesday both showed “Doji” candles (i.e., indecision) after a two-week decline. That came right against the bearish Propulsion Momentum level ($124.27) and the TDST Line ($123.70) while then also marking a daily Setup -9 count yesterday. That’s enough for us to play that this is a trading bottom, with me proposing a subsequent move up to near the late-March high of $140. As such, we will buy the May 27th $128 call and sell the $140 against it for $3.81 debit based on last night’s mid-closing price. NKE doe not report earnings till late June so that’s not a factor for our holding period. We are laying out about 32% of the spread differential on a counter-trend play that we needn’t stick around very long for if support breaks.

Partial Closing Trades

• MTCH: 103.17% Gain: Sell to close May 20, 2022 $105/$95 Put Vertical @ $6.40 Credit. We will remove one-half of the May 20th $105/$95 put spread we are long, as the price has moved beneath the hedge (i.e., lower) strike price, having already yielded us just over a 100% return on premium outlaid since we put this on April 1. Yesterday closed at $94.13 mid-price.   

• CC: 13.73% Loss: Sell to close May 6, 2022 $32/$29 Put Vertical @ $0.60 Credit.  We have a bearish position on this with a long May 6th $32/$29 put spread.  Price is only a little above where we put this trade on, and it just yesterday rejected its +13’s Risk Level, but I generally like to see trades turn profitable fairly quickly, and this one hasn’t in the two weeks or so since we entered.  So, we will exit half today (and the balance any day that now closes above $33.32).

Closing Trades

• QQQ: 88.19% Gain: Sell to close May 20, 2022 $362/$350 Put Vertical @ $7.81 Credit. We closed half this position on April 7 at a $5.84 credit. Therefore, the average gain on this trade was 60.34% and the average cost basis to exit this trade is $6.83 credit.

• GE: 55.21% Gain: Buy to close Apr 29, 2022 $97/$95 Call Vertical @ $0.43 Debit. We took partial profits for this trade on April 7 at a $0.42  debit. Therefore, the average gain on this trade was 55.73% and the average cost basis to exit this trade is $0.43 debit. Given the recent low against both the TDST line (red) and horizontal support level (dark purple), we will close this trade. 

DIS Bullish Opening Trade Signal

Strategy Details

Strategy: Call Debit Spread

Strategy Direction: Bullish

Details: Buy May 6 $139/$131 Call Vertical @ $2.80 Debit

Counter Trend Signal: This is a bullish strategy on a stock or ETF that is experiencing a bearish trend.

1M/6M Trends: Bearish/Bearish

Technical Score: 3/10

OptionsPlay Score: 104

View DIS Trade

Entering the Trade

Use the following details to enter the trade on your trading platform. Please note that if there is a multi-leg option strategy, it should be entered as a single trade.

Investment Rationale

This is the third time down to what had been the bottom of a gap higher made last November. Each of the prior two lows into the gap bottomed on a Setup -9 count, and now we see a third one PLUS a Sequential -13 signal (finally finished from the first of the three -9 counts). This would be a perfect place for DIS to again stage a trading rally from. With earnings coming out on May 11th, we’ll stick to a short-dated option to play what may come along with a market bounce, too. Based upon Tuesday’s closing mid prices, our purchase will lay out about 35% of the strike differential — very much in line with call spreads we often enter with the OTM strike bearing an ~25 delta.

Closing Trades

• ALL: 27.27% Loss: Buy to close May 20, 2022 $140/$145 Call Vertical @ $2.80 Debit. Close the remainder of this position. Therefore, the average loss on this trade was 14.09% and the average cost basis to exit this trade is $2.49 Debit. 

View WFC Trade

WFC Bullish Opening Trade Signal

Strategy Details

Strategy: Put Credit Spread

Strategy Direction: Bullish

Details: Sell to open May 13, 2022 $45/$48 Put Vertical @ $1.05 Credit

Counter Trend Signal: This is a bullish trade on a stock that is experiencing a bearish trend. 

1M/6M Trends: Bearish/Bearish

Technical Score: 8/10

OptionsPlay Score: 91

Entering the Trade

Use the following details to enter the trade on your trading platform. Please note that if there is a multi-leg option strategy, it should be entered as a single trade. 

Investment Rationale

Our bullish DailyPlay today is Wells Fargo (WFC). WFC is part of the Financials sector that has shown poor performance in recent weeks. However, Financials are finding support at current levels and WFC is is showing signs of outperformance relative to the sector in the last few days. WFC also bounced higher at the $48 major support level which provides a good risk/reward bullish opportunity. 

View UNH Trade

UNH Bullish Opening Trade Signal

Strategy Details

Strategy: Call Debit Spread

Strategy Direction: Bullish

Details: Buy May 20, 2022 $540/$570 Call Vertical @ $12.13 Debit

Trend Continuation Signal: This is a bullish strategy on a stock or ETF that is experiencing a bullish trend. 

1M/6M Trends: Bullish/Bullish

Technical Score: 10/10

OptionsPlay Score: 87

Entering the Trade

Use the following details to enter the trade on your trading platform. Please note that if there is a multi-leg option strategy, it should be entered as a single trade.

Investment Rationale

UNH has broken out to new all-time highs, finding support on Monday this week right at its bearish Propulsion Momentum level and then shooting higher. We expect this to carry higher over coming weeks to target the $570 level, where both daily and weekly charts show Propulsion Full Exhaustion targets. (Please note that the company reports quarterly earnings next week (4/14 before the open) so realize there is increased risk and volatility expected around that report.) So, we’ll buy the May 20th $540 call and sell the $570 against it for a $12.12 debit. (Given the high cost to each spread, consider doing two of them in order to allow some exit strategy that isn’t all or nothing. We’re laying out about 40% of the strike differential, which is a bit higher than I normally like. However, the options are a bit high-priced because of the upcoming earnings report.

Partial Closing Trades

• GE: 56.25% Gain: Buy to close April 29, 2022 $95/$97 Call Vertical @ $0.42 Debit. Close half of this position. For example, if 4 contracts were opened for this trade, we recommend closing 2 contracts. 
• LOW: 22.91% Loss: Sell to close May 13, 2022 $205/$220 Call Vertical @ $3.87 Credit. Close half of this position.
• ALL: 0.91%% Gain: Buy to close May 20, 2022 $140/$145 Call Vertical @ $2.18 Debit. Close half of this position.  

Closing Trades

• DHI: 92.1% Loss: Sell to close DHI May 20, 2022 $85/$97.5 Call Vertical @ $0.35 Credit. We closed half this position on March 24 at a $4.43 credit. Therefore, the average loss on this trade was 73.8% and the average cost basis to exit this trade is $2.39 credit. 
• PYPL: 56.12%% Gain: Sell to close PYPL Apr 29, 2022 $100/$120 Call Vertical @ $10.85 Credit. We took partial profits for this trade on March 24 at a $12.62 credit. Therefore, the average gain on this trade was 68.9% and the average cost basis to exit this trade is $11.74 credit. 
• TAN: 42.77% Gain: Buy to close TAN Apr 22, 2022 $66/$74 Put Vertical @ $1.90 Debit. We took partial profits for this trade on March 30 at a $1.70 debit. Therefore, the average gain on this trade was 45.8% and the average cost basis to exit this trade is $1.80 debit. 

Taking Partial Profits

• CL:80% Gain: Sell to close April 29 $74/$78 Call Vertical @ $2.52 Credit. Close half of this position. For example, if 10 contracts were opened for this trade, we recommend closing 5 contracts.

We bought this call spread just 11 days ago, and in that time we have seen the stock move 7/8 of the way toward reaching its higher strike price, making us about 80% on our initial investment. Yesterday marked a daily Setup +9 count against its Fibonacci 38% retracement back up to the high. In this very unclear market environment, that’s more than enough reason for me to take off half of this trade.