Archive for the ‘10K Strategies’ Category
Sunday, July 15th, 2018
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
Palo Alto Networks (PANW) Breaks to Record Highs, What’s Next?
Palo Alto Networks has seen a remarkable rise in its stock price over the last few years and several articles on The Motley Fool suggest there will be further upside. Here are the latest two – Palo Alto Networks’ Bull Run Probably Won’t Be Ending Anytime Soon and Forget Cryptocurrencies: You’re Better Off Buying These 3 Stocks.
On a daily chart, PANW appears to be consolidating in a range since around the middle of May. However, a closer look reveals a notable technical break. Range support near $200 wasn’t just important because of the psychological implications, the level also triggered a sharp turn in 2015 that led to a two-year correction. Although there have been marginal breaches below the level since the stock price initially climbed above it a few months ago, bears have been unable to drive the stock price below it on a sustained basis. To the upside, resistance near $216 had capped rallies in June but the recent bullish break of the level suggests the uptrend has resumed.
PANW Chart July 2018
*source Tradingview.com
If you agree there’s further upside ahead for PANW, consider this trade which is a bet that the stock will continue to advance over the next six weeks, or at least not decline very much.
Buy To Open PANW 24AUG18 212.5 Puts (PANW180824P212.5)
Sell To Open PANW 24AUG18 215 Puts (PANW180824P215) for a credit of $0.95 (selling a vertical)
This price was $0.02 less than the mid-point of the option spread when PANW was trading near $216. 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 $92.50 and your broker would charge a $250 maintenance fee, making your investment $157.50 ($250 – $92.50). If PANW closes at any price above $215 on August 24, both options would expire worthless, and your return on the spread would be 59% (552% annualized).
Changes to Investor’s Business Daily (IBD) Top 50 This Week:
IBD Underlying Updates July 12, 2018
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
Tags: Auto-Trade, Bullish Options strategies, Credit Spreads, Earnings Option Strategy, Monthly Options, PANW, Portfolio, Profit, profits, Puts, Risk, Stocks vs. Stock Options, TastyWorks, Terry's Tips, thinkorswim, Weekly Options
Posted in 10K Strategies, Credit Spreads, Earnings Announcement Options Strategy, Monthly Options, Stock Option Trading Idea Of The Week, Stock Options Strategies, Terry's Tips Portfolios, Weekly Options | No Comments »
Sunday, July 8th, 2018
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
Micron Technology (MU) Dips To Support, Is It a Buy?
Micron Technology stock has been impacted by negative headline news as of late but these following two articles make a strong case for why this news is not likely to cause bearish pressure for the stock price moving forward. Micron’s China Woes May Not Be the Disaster Investors Thought and Micron Technology is rebounding after saying China ban will have minimal impact.
MU has been correcting lower since the end of May but is seen trading near an important technical inflection point, and has already shown signs of buyer’s protecting the area. The support area is derived from a rising trendline that originates back to a low printed in August last year as well as a horizontal level at $49.62. The rising trendline last triggered a bounce in May which led to a break to record highs. The horizontal level carries psychological properties as it falls near $50. The level acted as major resistance in late 2017 and is now seen as support.
MU Chart July 2018
*source Tradingview.com
If you agree there’s further upside ahead for MU, consider this trade which is a bet that the stock will continue to advance over the next six weeks, or at least not decline very much.
Buy To Open MU 17AUG18 50 Puts (MU180817P50)
Sell To Open MU 17AUG18 52.5 Puts (MU180817P52.5) for a credit of $0.98 (selling a vertical)
This price was $0.02 less than the mid-point of the option spread when MU was trading near $53. 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 $95.50 and your broker would charge a $250 maintenance fee, making your investment $154.50 ($250 – $95.50). If MU closes at any price above $52.50 on August 17, both options would expire worthless, and your return on the spread would be 62% (580% annualized).
Changes to Investor’s Business Daily (IBD) Top 50 This Week:
IBD Underlying Updates July 5, 2018
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
Tags: Auto-Trade, Bullish Options strategies, Credit Spreads, diagonal spreads, Earnings Option Strategy, Monthly Options, MU, Portfolio, Profit, profits, Puts, Risk, Stocks vs. Stock Options, TastyWorks, Terry's Tips, thinkorswim, Weekly Options
Posted in 10K Strategies, Credit Spreads, Earnings Announcement Options Strategy, Monthly Options, Stock Option Trading Idea Of The Week, Stock Options Strategies, Terry's Tips Portfolios, Weekly Options | No Comments »
Sunday, June 24th, 2018
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.
I thought I might share with you the first paragraph of this week’s report to our paying subscribers – “Bad Week for the Market (Down 1%), But Our Composite Portfolio Average Gains 5% Thanks to Blow-Out Week for Wiley Wolf (up 47%): A week ago, we were celebrating a 26.5% gain in Wiley Wolf when FB gained 3.6%, but that was nothing compared to this week’s colossal 47.6% gain on a 3.0% rise in the stock. In two weeks, the portfolio has moved from a value of $4,472 to today’s $8,353. The 10K Strategy can deliver extraordinary results when you are leaning to the bullish side and the underlying cooperates by going up (which you expect it to do or you wouldn’t have selected that stock in the first place). Positive results from this strategy also appeared this week in Rising Tide where the portfolio gained 10% while the underlying MA rose 1%.”
I hope you enjoy this week’s trading idea.
Terry
Lululemon (LULU) Stock Price Surges Following Earnings
LULU rose to record highs earlier this month following its earnings report. Several analysts think the stock can go a lot higher, here are two of them – Was Lululemon Athletica Inc’s Earnings Growth Better Than The Industry’s? and 7 Debt-Free Companies Doing Big Stock Buybacks
Lululemon Athletica’s stock price gapped higher following the earnings announcement, reaching a high just shy of the $130 handle. Momentum has slowed somewhat, yet the technicals remain supportive as the stock trades within a rising up channel and has held above it’s 20-day moving average.
LULU Chart June 2018
If you agree there’s further upside ahead for LULU, 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 LULU 27JUL18 120 Puts (LULU180727P120)
Sell To Open LULU 27JUL18 124 Puts (LULU180727P124) for a credit of $1.48 (selling a vertical)
This price was $0.02 less than the mid-point of the option spread when LULU was trading near $124. 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 $145.50 and your broker would charge a $400 maintenance fee, making your investment $254.50 ($400 – $145.50). If LULU closes at any price above $124 on July 27, both options would expire worthless, and your return on the spread would be 57% (650% annualized).
Changes to Investor’s Business Daily (IBD) Top 50 This Week:
IBD Underlying Updates June 21, 2018
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
Tags: Auto-Trade, Bull Put Credit Spread, Bullish Options strategies, Calls, Credit Spreads, LULU, Lulu Lemon, Monthly Options, Portfolio, Profit, profits, Puts, Risk, TastyWorks, Terry's Tips, thinkorswim, Weekly Options
Posted in 10K Strategies, Credit Spreads, Monthly Options, Stock Option Trading Idea Of The Week, Stock Options Strategies, Terry's Tips Portfolios, Weekly Options | No Comments »
Monday, June 4th, 2018
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 that places trades that you read about here has gained 99.7% so far in 2018. That’s pretty close to doubling our money in less than six months, and all the paying Terry’s Tips subscribers who are following that portfolio, either on their own or through the free Auto-Trade service offered by thinkorswim are happy campers right now.
Terry
Grubhub (GRUB) Offers An Attractive Entry Point
Grubhub’s stock price recently broke higher and several analysts expect the upside momentum to continue. This article published on Benzinga includes a target that suggests about a 20% upside. A detailed article outlining why there could be more upside in GRUB was also published on InvestorPlace. While the second article has a bit more of a conservative target, it still points to a potential 10% gain in the stock price.
The GRUB technical chart is signaling a bullish continuation. The stock price broke out from a bullish flag pattern in early May and has more recently cleared above a clear horizontal resistance level found near $105. The same level should protect any corrections for bulls to remain in control. The stock price has also consistently traded above its 20-day moving average since the bull flag was activated.
GRUB Chart June 2018
*source Tradingview.com
If you agree there’s further upside ahead for GRUB, 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 GRUB 29JUN18 105 Puts (GRUB180629P105)
Sell To Open GRUB 29JUN18 107 Puts (GRUB180629P107) for a credit of $0.83 (selling a vertical)
This price was $0.02 less than the mid-point of the option spread when GRUB was trading near $108. 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 $80.50 and your broker would charge a $200 maintenance fee, making your investment $119.50 ($200 – $80.50). If GRUB closes at any price above $107 on June 29, both options would expire worthless, and your return on the spread would be 67% (978% annualized).
Changes to Investor’s Business Daily (IBD) Top 50 This Week:
IBD Underlying Updates May 31, 2018
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
Tags: Auto-Trade, Bull Put Credit Spread, Bullish Options strategies, Calls, Credit Spreads, GRUB, Monthly Options, Portfolio, Profit, profits, Puts, Risk, Stocks vs. Stock Options, TastyWorks, Terry's Tips, thinkorswim, Weekly Options
Posted in 10K Strategies, Credit Spreads, Monthly Options, Stock Option Trading Idea Of The Week, Stock Options Strategies, Terry's Tips Portfolios, Weekly Options | No Comments »
Monday, May 28th, 2018
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 real-life Terry’s Tips portfolio that trades these spreads has gained 97% so far in 2018, and has 4 spreads in place that will increase the gain to 123% in 3 weeks if the underlying stock prices hold their current prices or go up by any amount. And the year will not be half over by then. Clearly, we have some happy campers who subscribe to our newsletter service, especially those who are having trades placed in their account through the Auto-Trade service offered by thinkorswim.
Terry
Can Nvidia (NVDA) Continue Its Earnings-driven momentum?
Several analysts have renewed their bullish NVDA outlook following their recent earnings report. Here are two of them – Why Nvidia (NVDA) Is a Strong Buy and Nvidia Seen Soaring to Record on Explosive Growth.
NVDA pushed firmly higher following earnings earlier this month, gapping above a horizontal level at $239. After briefly piercing to a record high, the stock has consolidated lower. Buyers have stepped in slightly ahead of the horizontal level with the 20-day moving average providing additional support. This area remains an important zone of support for NVDA.
NVDA Chart May 2018
*source Tradingview.com
If you agree there’s further upside ahead for NVDA, consider this trade which is a bet that the stock will continue to advance over the next four weeks, or at least not decline very much.
Buy To Open NVDA 22JUN18 242.5 Puts (NVDA180622P242.5)
Sell To Open NVDA 22JUN18 245 Puts (NVDA180622P245) for a credit of $0.93 (selling a vertical)
This price was $0.02 less than the mid-point of the option spread when NVDA was trading near $249. 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 $90.50 and your broker would charge a $250 maintenance fee, making your investment $159.50 ($250 – $90.50). If NVDA closes at any price above $242.5 on June 22, both options would expire worthless, and your return on the spread would be 68% (834% annualized).
Changes to Investor’s Business Daily (IBD) Top 50 This Week:
IBD Underlying Updates May 25, 2018
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
Tags: Auto-Trade, Bullish Options strategies, Credit Spreads, Earnings Option Strategy, Earnings Play, Investors Business Daily, Monthly Options, NVDA, Portfolio, Profit, profits, Puts, Risk, TastyWorks, Terry's Tips, thinkorswim, Weekly Options
Posted in 10K Strategies, Credit Spreads, Monthly Options, Stock Option Trading Idea Of The Week, Stock Options Strategies, Terry's Tips Portfolios, Weekly Options | No Comments »
Monday, May 14th, 2018
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
Consider IPG Photonics (IPGP) Following the Technical Breakout
In addition to being listed as one of the IBD Top 50 companies, Investor’s Business Daily recently wrote about IPGP, outlining the reasons why the growth stock is setting up for another advance. Also take a look at this publication which discusses why IPGP is trending.
IPGP broke higher late last week from a bullish flag pattern that has been setting up for most of the year thus far. Technical traders tend to keep a close eye on flag patterns, especially in assets that have had a strong trend which IPGP certainly displayed in 2017. Technical support is found nearby from a horizontal level at $248 which marks last years high. Also near the level is additional support from the top of the broken flag pattern.
IPGP Chart May 2018 vertical spread
*source Tradingview.com
If you agree there’s further upside ahead for IPGP, 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 IPGP 15JUN18 240 Puts (IPGP180615P240)
Sell To Open IPGP 15JUN18 250 Puts (IPGP180615P250) for a credit of $3.58 (selling a vertical)
This price was $0.02 less than the mid-point of the option spread when IPGP was trading near $151. 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 $355.50 and your broker would charge a $1000 maintenance fee, making your investment $644.50 ($1000 – 355.50). If IPGP closes at any price above $250 on June 15, both options would expire worthless, and your return on the spread would be 55% (627% annualized).
Changes to Investor’s Business Daily (IBD) Top 50 This Week:
IBD Underlying Updates May10, 2018
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
Tags: Auto-Trade, Bull Put Credit Spread, Bullish Options strategies, Calendar Spreads, Calls, Credit Spreads, IPGP, Monthly Options, Portfolio, Profit, profits, Puts, Risk, Stocks vs. Stock Options, TastyWorks, Terry's Tips, thinkorswim, Weekly Options
Posted in 10K Strategies, Credit Spreads, Earnings Announcement Options Strategy, Monthly Options, Stock Options Strategies, Terry's Tips Portfolios, Weekly Options | No Comments »
Sunday, May 6th, 2018
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
Align Technologies Consolidates In a Range, Is It Ready To Break Higher?
Align Technology posted a strong performance last year. Not only did it outperform its sector, it was also ranked the top-performing stock in the S&P 500 for 2017. The following articles outline the details – 3 Growth Stocks I’m Holding Onto No Matter How Bumpy the Market Gets and Is Align Technology (ALGN) Outperforming Other Medical Stocks This Year?
From a technical perspective, ALGN has been mostly consolidating within a range over the last few months. Ahead of the recent earning’s call, the stock briefly dipped below range support at $243 but it managed to regain it following the earnings report. Current prices offer an opportunity to buy the stock near the lower bound of the consolidation. There is some potential for an upside break, in line with the broader trend. The rationale being that a quite few of the stocks listed in the IBD Top 50 list have shown strength in the past week and some have even broken to fresh highs. This signals some potential that the bullish trend may have resumed in the markets.
ALGN Chart May 2018 – Free Trade
*source Tradingview.com
If you agree there’s further upside ahead for ALGN, 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 ALGN 08JUN18 255 Puts (ALGN180608P255)
Sell To Open ALGN 08JUN18 257.5 Puts (ALGN180608P257.5) for a credit of $1.13 (selling a vertical)
This price was $0.02 less than the mid-point of the option spread when ALGN was trading near $259. 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 $110.50 and your broker would charge a $250.00 maintenance fee, making your investment $139.50 ($250 – $110.50). If ALGN closes at any price above $257.50 on June 8, both options would expire worthless, and your return on the spread would be 79% (904% annualized).
Changes to Investor’s Business Daily (IBD) Top 50 This Week:
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
Tags: ALGN, Auto-Trade, Bullish Options strategies, Calls, Credit Spreads, Monthly Options, Portfolio, Profit, profits, Puts, Risk, TastyWorks, Terry's Tips, thinkorswim, Weekly Options
Posted in 10K Strategies, Credit Spreads, Monthly Options, Stock Option Trading Idea Of The Week, Stock Options Strategies, Terry's Tips Portfolios, Weekly Options | No Comments »
Monday, April 23rd, 2018
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
Micron Technology (MU) Retreats – Can it Hold Above the Psychological $50 Handle?
Micron Technology has posted an impressive gain in the early year and several analysts are expecting more upside. The following two articles provide the details behind this view – 3 Stocks That Could Double Your Money and Bull of the Day: Micron (MU).
MU has declined as of late and is now seen trading near an overwhelming confluence of support. A rising trendline is in play that originates from this year’s low, and near it, the $50 price point comes into play. The stock briefly traded below the psychological handle earlier this month but buyers quickly stepped in to lift it back above the horizontal level. As well, the 20 and 50-day moving averages have converged close to the rising trendline.
MU(micron) Chart April 2018
*source Tradingview.com
If you agree there’s further upside ahead for MU, consider this trade which is a bet that the stock will continue to advance over the next four weeks, or at least not decline very much.
Buy To Open MU 18MAY18 48 Puts (MU180518P48)
Sell To Open MU 18MAY18 50 Puts (MU180518P50) for a credit of $0.68 (selling a vertical)
This price was $0.02 less than the mid-point of the option spread when MU was trading near $50. 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 $65.50 and your broker would charge a $200 maintenance fee, making your investment $134.50 ($200 – $65.50). If MU closes at any price above $50.00 on May 18, both options would expire worthless, and your return on the spread would be 49% (658% annualized).
Changes to Investor’s Business Daily (IBD) Top 50 This Week:
IBD Underlying Updates April 19, 2018
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
Tags: Bull Put Credit Spread, Calls, Credit Spreads, galloping turltle, Micron, MU, Portfolio, profits, Puts, Risk, TastyWorks, terrystips, thinkorswim autotrade, Weekly Options
Posted in 10K Strategies, Credit Spreads, Monthly Options, Stock Option Trading Idea Of The Week, Stock Options Strategies, Terry's Tips Portfolios, Weekly Options | No Comments »
Sunday, April 1st, 2018
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
Is Stamps.com (STMP) Ready to Resume Higher?
Zacks research recently wrote a compelling article outlining why STMP is poised for further gains. As well, this analyst believes there is potential for about a 30% upside based on their recent price target revision.
From a technical perspective, STMP has been consolidating sideways following a gap up in late February that was inspired by a stellar earnings report. The consolidation is an indication of strength when considering that the markets have been under pressure as of late. Buyers have stepped in to keep the stock trading above the $190 price point and an upside hurdle is seen around $210 as it has held the stock lower on a few attempts this year.
STMP Chart March 2018
*source Tradingview.com
If you agree there’s further upside ahead for Stamps.com, consider this trade which is a bet that the stock will continue to advance over the next four weeks, or at least not decline very much.
Buy To Open STMP 27APR18 192.5 Puts (STMP180427P192.5)
Sell To Open STMP 27APR18 195 Puts (STMP180427P195) for a credit of $0.98 (selling a vertical)
This price was $0.02 less than the mid-point of the option spread when STMP was trading near $201. 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 $95.50 and your broker would charge a $250 maintenance fee, making your investment $154.50 ($250 – $95.50). If STMP closes at any price above $195.00 on April 27, both options would expire worthless, and your return on the spread would be 62% (778% annualized).
Changes to Investor’s Business Daily (IBD) Top 50 This Week:
IBD Underlying Updates March 29, 2018
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
Tags: Auto-Trade, Bull Put Credit Spread, Bullish Options strategies, Calls, Credit Spreads, Monthly Options, Portfolio, profits, Puts, Risk, STMP, TastyWorks, Terry's Tips, thinkorswim, Weekly Options
Posted in 10K Strategies, Credit Spreads, Monthly Options, Stock Option Trading Idea Of The Week, Stock Options Strategies, Terry's Tips Portfolios, Weekly Options | No Comments »
Sunday, March 18th, 2018
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 portfolio that trades these spreads in an actual account for subscribers to follow on their own or have trades made for them in their account through the free Auto-Trade service offered by thinkorswim has gained 79% so far in 2018.
Terry
Nvidia (NVDA) Is on the Verge of a Big Breakout
Several analysts have an optimistic outlook towards NVDA despite the stock trading near some important resistance. Here are two of them – Things Are Going Right for NVIDIA and AMD and Semiconductor Stocks Soar to Highest Level in Decades Despite Deal Woes.
NVDA tested resistance at the big psychological $250 price point in the past week for the third time this year. However, with momentum indicators showing no signs of a top and as triple tops are generally rare, the probabilities suggest sellers will give up defending the resistance level. Retracements from the level have also become increasingly narrow since the initial approach in early February which provides a technical indication that buyers are regaining control. When a big level such as the one we are seeing in Nvidia now breaks, it often accompanies some sharp upside follow through.
NVDA Chart March 2018
*source Tradingview.com
If you agree there’s further upside ahead for Nvidia, 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 NVDA 20APR18 245 Puts (NVDA180420P245)
Sell To Open NVDA 20APR18 250 Puts (NVDA180420P250) for a credit of $2.20 (selling a vertical)
This price was $0.02 less than the mid-point of the option spread when NVDA was trading near $250. Unless the stock rallies quickly from here, you should be able to get close to this amount.
If you use our favorite broker for this trade, tastyworks, your commission on this trade will only be $1 per opening contract ($2 per spread) (and there is no commission on closing trades, only the $.10 clearing fee). Each contract would then yield $218 and your broker would charge a $500 maintenance fee, making your investment $282 ($500 – $218). If NVDA closes at any price above $250.00 on April 20, both options would expire worthless, and your return on the spread would be 77% (882% annualized).
Changes to Investor’s Business Daily (IBD) Top 50 This Week:
IBD Underlying Updates March 15, 2018
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
Tags: autotrade, Bull Put Credit Spread, Bullish Options strategies, Calls, IBD, Investors Business Daily, NVDA, portfolios, Profit, Puts, Risk, TastyWorks, tdameritrade, Terry's Tips, thinkorswim, Vertical Put Spread, Weekly Options
Posted in 10K Strategies, Credit Spreads, Monthly Options, Stock Option Trading Idea Of The Week, Stock Options Strategies, Terry's Tips Portfolios, Weekly Options | No Comments »
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