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Terry's Tips Stock Options Trading Blog
March 17, 2019
Will MasTec’s (MTZ) Growth Prospects Keep the Stock Bid?
This week we are looking at another of the Investor’s Business Daily (IBD) Top 50 List companies. We use this list in one of our options portfolios to spot outperforming stocks and place option spreads that take advantage of the momentum. The Terry’s Tips actual portfolio that trades these ideas has gained 164% so far in 2019. As always, future results can’t be assured to be as good, but we are pleased with the results so far.
Terry
Will MasTec’s (MTZ) Growth Prospects Keep the Stock Bid?
MasTec’s recent earnings report exceeded expectations and several analysts believe growth trends will continue, here are two of them – MasTec’s 2018 Results: A Lot to Like Here and Will MasTec Earnings Grow Over The Next Year?
Although a daily chart is displayed below, the strongest technical indicator for MTZ is seen on a weekly chart where the stock regained it’s 100 moving average on a sustained basis. The daily chart confirms the uptrend as the stock is held within a rising trend channel. The stock has held above a horizontal level at $47.30 in recent sessions, this is a level that was well respected resistance for most of 2018 on several attempts. Further support in the event of a dip lower is seen near $45.55 where a horizontal level is found as well as the 20-day moving average.
[caption id="attachment_2356" align="alignnone" width="300"]
MZT Chart March 2019[/caption]
*source Tradingview.com
If you agree there's further upside ahead for MZT, consider this trade which is a bet that the stock will continue to advance over the next five weeks, or at least not decline very much.
Buy To Open MZT 18APR19 44 Puts (MZT190418P44)
Sell To Open MZT 18APR19 47 Puts (MZT190418P47) for a credit of $0.85 (selling a vertical)
This price was $0.02 less than the mid-point of the option spread when MZT was trading near $48. Unless the stock rallies quickly from here, you should be able to get close to this amount.
Your commission on this trade will only be $2.50 per spread (the rate charged by thinkorswim for Terry’s Tips’ subscribers). Each contract would then yield $82.50 and your broker would charge a $300 maintenance fee, making your investment $217.50 ($300 – $82.50). If MZT closes at any price above $47 on April 18, both options would expire worthless, and your return on the spread would be 38% (433% annualized).
Changes to Investor’s Business Daily (IBD) Top 50 This Week:
[caption id="attachment_2357" align="alignnone" width="258"]
IBD Underlying Updates March 14, 2019[/caption]
We have found that the Investor’s Business Daily Top 50 List has been a reliable source of stocks that are likely to move higher in the short run. Recent additions to the list might be particularly good choices for this strategy, and deletions might be good indicators for exiting a position that you might already have on that stock.
As with all investments, you should only make option trades with money that you can truly afford to lose.
Happy trading,
Terry
March 10, 2019
MGM Growth Properties (MGP) Dips Lower, Is It A Buy?
This week we are looking at another of the Investor’s Business Daily (IBD) Top 50 List companies. We use this list in one of our options portfolios to spot outperforming stocks and place option spreads that take advantage of the momentum.
Terry
MGM Growth Properties (MGP) Dips Lower, Is It A Buy?
Several analysts think MGM Growth Properties has a lot more upside, here are two of them – A Careful Analysis of MGM Growth Properties and MGM Growth Properties On The Radar of Prospective Investors.
MGP is seen pulling back after testing resistance from a trendline drawn by connecting a high from late 2017 with the high from last year. Momentum indicators show no reason to believe a triple top is playing out and candlestick patterns on the higher time frames point to strength in recent upward momentum. The stock is currently testing its 200-day moving average which could be a spot where bulls might look to reenter.
[caption id="attachment_2352" align="alignnone" width="300"]
MGP Chart March 2019[/caption]
*source Tradingview.com
If you agree there's further upside ahead for MGP, consider this trade which is a bet that the stock will continue to advance over the next six weeks, at least a little.
Buy To Open MGP 18APR19 25 Puts (MGP190418P25)
Sell To Open MGP 18APR19 30 Puts (MGP190418P30) for a credit of $1.18 (selling a vertical)
This price was $0.02 less than the mid-point of the option spread when MGP was trading near $30. Unless the stock rallies quickly from here, you should be able to get close to this amount.
Your commission on this trade will only be $2.50 per spread (the rate charged by thinkorswim for Terry’s Tips’ subscribers). Each contract would then yield $115.50 and your broker would charge a $500 maintenance fee, making your investment $384.50 ($500 – $115.50). If MGP closes at any price above $30 on April 18, both options would expire worthless, and your return on the spread would be 30% (281% annualized).
Changes to Investor’s Business Daily (IBD) Top 50 This Week:
[caption id="attachment_2353" align="alignnone" width="258"]
IBD Underlying Updates March 7, 2019[/caption]
We have found that the Investor’s Business Daily Top 50 List has been a reliable source of stocks that are likely to move higher in the short run. Recent additions to the list might be particularly good choices for this strategy, and deletions might be good indicators for exiting a position that you might already have on that stock.
As with all investments, you should only make option trades with money that you can truly afford to lose.
Happy trading,
Terry
March 3, 2019
American Tower Corp (AMT) Rallies to Record Highs, What’s Next?
This week we are looking at another of the Investor’s Business Daily (IBD) Top 50 List companies. We use this list in one of our options portfolios to spot outperforming stocks and place option spreads that take advantage of the momentum. The actual Terry’s Tips portfolio which trades these weekly trade ideas has gained 157% so far in 2019, by far surpassing our other portfolios which have enjoyed average gains of 19% for the first two months of the year. Of course, past results can’t always be replicated in the future, but we are pleased with the results so far this year.
Terry
American Tower Corp (AMT) Rallies to Record Highs, What’s Next?
Several analysts remain bullish AMT following their earnings report in the past week, here are two of them – American Tower Delivers High-Speed Growth in Q4 and Gearing for a bull run? American Tower Corp Moves 7.42% For The Quarter.
AMT has been rising within an ascending trend channel that dates back to a low printed in late December. The price action surrounding the earnings report suggests that bulls remain in control. The stock was volatile on the earnings date, rising about 2% initially but then reversing sharply to end lower on the day. However, a rally the following day after testing the lower bound of the trend channel saw the price break to a record high, fully erasing the earnings-inspired drop. The technical outlook points to the potential of a rally towards the top of the rising trend channel.
*source Tradingview.com
If you agree there's further upside ahead for AMT, consider this trade which is a bet that the stock will continue to advance over the next five weeks, or at least not decline very much.
Buy To Open AMT 05APR19 175 Puts (AMT190405P175)
Sell To Open AMT 05APR19 177.5 Puts (AMT190405P177.5) for a credit of $0.85 (selling a vertical)
This price was $0.02 less than the mid-point of the option spread when AMT was trading near $178. Unless the stock rallies quickly from here, you should be able to get close to this amount.
Your commission on this trade will only be $2.50 per spread (the rate charged by thinkorswim for Terry’s Tips’ subscribers). Each contract would then yield $82.50 and your broker would charge a $250 maintenance fee, making your investment $167.50 ($250 – $82.50). If AMT closes at any price above $177.5 on April 05, both options would expire worthless, and your return on the spread would be 49% (559% annualized).
Changes to Investor’s Business Daily (IBD) Top 50 This Week:
[caption id="attachment_2347" align="alignnone" width="168"]
IBD Underlying Updates February 28, 2019[/caption]
We have found that the Investor’s Business Daily Top 50 List has been a reliable source of stocks that are likely to move higher in the short run. Recent additions to the list might be particularly good choices for this strategy, and deletions might be good indicators for exiting a position that you might already have on that stock.
As with all investments, you should only make option trades with money that you can truly afford to lose.
Happy trading,
Terry
This Chicago brokerage firm with the unlikely name thinkorswim, Inc. by TD Ameritrade is considered by many to be the best option-friendly broker. For openers, they have extremely good analytic software and their option trading platform is exceptional. Thinkorswim Mobile has been called the best mobile app in the industry. In 2017, TD Ameritrade received 4 stars out of 5 in the annual Barron`s* Best Online Brokers Survey. TD Ameritrade was tops as an online broker for long-term investors and for novices. The company is the only broker that receives the highest 5.0 score for research amenities among all firms participated in the ranking last year.
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