Archive for the ‘10K Strategies’ Category
Saturday, September 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. The actual portfolio that Terry’s Tips carries out with these plays we send to you each week has gained 98.5% so far this year. We started out 2018 with $5000 in the portfolio and withdrew that amount in June so that subscribers who mirrored it in their own account or had trades executed for them with the free Auto-Trade service at thinkorswim have almost $5000 left and it is entirely profits for them.
Terry
Has Netflix (NFLX) Found A Bottom?
Despite a recent correction, market sentiment towards Netflix stock remains positive while certain analysts see a notable upside from current levels. Take a look at this recent article posted on Investopedia that states a 30% rally could be in the cards for NFLX and the following article posted on Seeking Alpha that builds a strong case for remaining bullish.
There are several technical developments over the last month or so that suggest Netflix has turned bullish once again. The stock price is seen climbing above horizontal resistance at $356 and holding above the 20-day moving average. Aside from that, a recent convergence with the S&P 500 might be sending the strongest signal of all. Note that NFLX diverged from the index for about a month starting from mid-July to correct lower. Since around the middle of August, the stock price has once regained its correlation with the popular index, which is often a tell that an important bottom might be in place. The S&P 500 is added to the chart below and denoted in bars to illustrate the divergence and subsequent convergence.
NFLX Chart September 2018
*source Tradingview.com
If you agree there’s further upside ahead for NFLX, consider this trade which is a bet that the stock will continue to advance over the next four weeks, at least a little bit.
Buy To Open NFLX 12OCT18 362.5 Puts (NFLX181012P362.5)
Sell To Open NFLX 12OCT18 365 Puts (NFLX181012P365) for a credit of $1.18 (selling a vertical)
This price was $0.02 less than the mid-point of the option spread when NFLX was trading near $365. 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 $250 maintenance fee, making your investment $134.50 ($250 – $115.50). If NFLX closes at any price above $365 on October 12, both options would expire worthless, and your return on the spread would be 86% (1256% annualized).
Changes to Investor’s Business Daily (IBD) Top 50 This Week:
IBD Underlying Updates September 13, 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, Earnings Option Strategy, Monthly Options, NFLX, 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 »
Monday, September 10th, 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 which trades essentially every weekly play that we send to you has gained 91% so far this year (after paying all commissions, of course). The portfolio started out the year with $5000, and on June 15, 2018, we withdrew $5000 from the portfolio so that all subscribers who followed it would all their money back and be playing with pure profits. The portfolio is now worth $4552.
I especially like this week’s idea because I like Mastercard and believe that last week’s weakness in the stock price was unwarranted. Enjoy the full report below.
Terry
Mastercard (MA) Expected to Continue the Steady Rise
Among the list of IBD Top 50 companies Mastercard stands out as its uptrend is far steadier than any of the other companies. These two articles suggest the stock will continue the trend – Mastercard’s Stock May Have Big Gains Ahead and Mastercard’s Strategy Suggests Further Stock Price Growth Ahead After 60% Rise.
MA has been trading in an uptrend channel that originates back to a low posted in December 2017. The stock price pulled back in the past week and is near support that consists of a horizontal level at $208 as well as the 20-day moving average. Slightly below the support confluence is the lower bound of the uptrend channel. In this context, the stock appears to be well support with a clear upside bias.
MA Chart September 2018
*source Tradingview.com
If you agree there’s further upside ahead for MA, 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 MA 12OCT18 207.5 Puts (MA181012P207.5)
Sell To Open MA 12OCT18 210 Puts (MA181012P210) for a credit of $0.93 (selling a vertical)
This price was $0.02 less than the mid-point of the option spread when MA was trading near $211. 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 MA closes at any price above $210 on October 12, 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 September 6, 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, Credit Spreads, MA, 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 Option Trading Idea Of The Week, Stock Options Strategies, Terry's Tips Portfolios, Weekly Options | No Comments »
Monday, August 27th, 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.
At Terry’s Tips, we have a portfolio that actually trades most of the ideas we share here. The portfolio has experienced some losses along the way, but so far in 2018, it has recorded an 82% gain after paying all commissions.
Terry
Consider RealPage (RP) Following the Technical Break
RealPage has received some positive new coverage as of late, take a look at – What Investors Should Know About RealPage Inc’s Financial Strength and RealPage(RP) Price Target Raised to $67.00 at KeyCorp
On Friday, RP broke higher from a bullish flag pattern that had been forming for nearly four months. The pattern suggests the stock is ready to resume its momentum-driven rally, and break to new record highs. Adding strength to the technical outlook for RP is a 15-month rising trendline which held the stock higher during the recent correction. The length of time the trendline has remained intact reaffirms the momentum remains strongly to the upside for RealPage stock.
RP Chart August 2018
*source Tradingview.com
If you agree there’s further upside ahead for RP, 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 RP 21SEP18 55 Puts (RP180921P55)
Sell To Open RP 21SEP18 60 Puts (RP180921P60) for a credit of $1.08 (selling a vertical)
This price was $0.02 less than the mid-point of the option spread when RP was trading near $61. 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 $105.50 and your broker would charge a $500 maintenance fee, making your investment $394.50 ($500 – $105.50). If RP closes at any price above $60 on September 21, both options would expire worthless, and your return on the spread would be 27% (428% annualized).
Changes to Investor’s Business Daily (IBD) Top 50 This Week:
IBD Underlying Updates August 23, 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, Credit Spreads, Monthly Options, Portfolio, Profit, profits, Puts, RealPage, Risk, RP, 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 »
Sunday, August 19th, 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
Monolithic Power Systems (MPWR) Poised to Break to Record Highs
There have been some recent price target upgrades for MPWR that suggest the stock still has some further upside. Here are two of them – Monolithic Power Systems (MPWR) PT raised to $155 at Needham & Company and Brokerages Set Monolithic Power Systems, Inc. (MPWR) PT at $148.38.
The daily chart for MPWR shows three attempts at upside resistance found near $142. As triple top patterns are rare, even more so with strong uptrends like the one seen in MPWR, and upside break appears highly likely. As well, often stop losses get accumulated above notable horizontal levels. Once triggered, these stops provide fuel for a momentum-driven rally. The stock looks to be well supported as it recently recovered back above its 50-day moving average following a brief correction and has been consolidating in a range between prior highs and the 50 DMA.
MPWR Chart August 2018
*source Tradingview.com
If you agree there’s further upside ahead for MPWR, 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 MPWR 21SEP18 135 Puts (MPWR180921P135)
Sell To Open MPWR 21SEP18 140 Puts (MPWR180921P140) for a credit of $1.68 (selling a vertical)
This price was $0.02 less than the mid-point of the option spread when MPWR was trading near $142. 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 $165.50 and your broker would charge a $500 maintenance fee, making your investment $334.50 ($500 – $165.50). If MPWR closes at any price above $140 on September 21, both options would expire worthless, and your return on the spread would be 50% (570% annualized).
Changes to Investor’s Business Daily (IBD) Top 50 This Week:
IBD Underlying Updates August 16, 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, Credit Spreads, Earnings Option Strategy, Monthly Options, MPWR, Portfolio, 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 »
Monday, August 13th, 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
Match Group (MTCH) Surges to Record Highs, What’s Next?
Match Group broke to record highs in the past week and several analysts believe there is more upside, here are two of them – Match Group Is Still Undervalued and Wall Street is Falling in Love With Match Stock.
The main focus from a technical perspective is the upside momentum triggered by the recent earnings beat. MTCH climbed above major resistance that is found between $47.00 and $48.65 to trade to record highs. Recall that the stock traded in this resistance area ahead of the steep fall on news of Facebook launching a new dating service at the start of May. In the process of breaking to new highs, a succession of higher highs and lower highs has materialized from the May low. As often seen, the prior resistance area is now considered strong support, suggesting that dips in the stock will be short-lived.
MTCH Chart August 2018
*source Tradingview.com
If you agree there’s further upside ahead for MTCH, 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 MTCH 21SEP18 47 Puts (MTCH180821P47)
Sell To Open MTCH 21SEP18 50 Puts (MTCH180821P50) for a credit of $1.03 (selling a vertical)
This price was $0.02 less than the mid-point of the option spread when MTCH was trading near $51. 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 $100.50 and your broker would charge a $300 maintenance fee, making your investment $199.50 ($300 – $100.50). If MTCH closes at any price above $50 on September 21, both options would expire worthless, and your return on the spread would be 50% (468% annualized).
Changes to Investor’s Business Daily (IBD) Top 50 This Week:
IBD Underlying Updates August 9, 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, MTCH, Options Tutorial Program, 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, August 5th, 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
Globus Medical (GMED) Offers an Appealing Entry Point
Several analysts are looking for more upside in GMED, take a look at these two analysts who have recently revised up their upside targets – Oppenheimer Analysts Give Globus Medical a $57.00 Price Target and Let’s Make Some Money With Globus Medical.
From a technical perspective, GMED is seen pulling back in the past few sessions to a well-respected horizontal level found at $52.35. The level has previously acted as both resistance and support, including during a gap down in June. In addition to the horizontal level, the 200-day moving average is in play and held the stock higher on a dip late in the week.
GMED Chart August 2018
*source Tradingview.com
If you agree there’s further upside ahead for GMED, consider this trade which is a bet that the stock will continue to advance over the next seven weeks, or at least not decline very much.
Buy To Open GMED 21SEP18 50 Puts (GMED180921P50)
Sell To Open GMED 21SEP18 52.5 Puts (GMED180921P52.5) for a credit of $0.89 (selling a vertical)
This price was $0.02 less than the mid-point of the option spread when GMED was trading near $52.50. 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 $86.50 and your broker would charge a $250 maintenance fee, making your investment $163.50 ($250 – $86.50). If GMED closes at any price above $52.50 on September 21, both options would expire worthless, and your return on the spread would be 53% (403% annualized).
Changes to Investor’s Business Daily (IBD) Top 50 This Week:
IBD Underlying Updates August 2, 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, GMED, Monthly Options, Options Tutorial Program, Portfolio, Profit, profits, Puts, Risk, Stocks vs. Stock Options, 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 22nd, 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
Can Adobe Systems Continue the Upside Momentum?
ADBE has posted impressive gains in the year thus far, and several analysts believe there is further upside. Here are two of them – Why Adobe Systems Stock Has Jumped 39% So Far in 2018 and 4 impressive Liquid Stocks for Marvelous Returns.
Adobe Systems stock price has one of the strongest trends among the stocks listed on the IBD Top 50 list. The stock has been trading within a rising trend channel for the year thus far and dips have been short-lived. ADBE turned higher from a correction in late June and is seen currently on the verge of breaking to fresh record highs. Strong downside support is seen ahead of the channel bottom at the 20-day moving average which currently confluences with the psychological $250 level.
ADBE Chart July 2018
If you agree there’s further upside ahead for ADBE, 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 ADBE 31AUG18 255 Puts (ADBE180831P255)
Sell To Open ADBE 31AUG18 257.5 Puts (ADBE180831P257.5) for a credit of $1.05 (selling a vertical)
This price was $0.02 less than the mid-point of the option spread when ADBE was trading near $257. 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 $102.50 and your broker would charge a $250 maintenance fee, making your investment $147.50 ($250 – $102.50). If ADBE closes at any price above $257.50 on August 31, both options would expire worthless, and your return on the spread would be 69% (646% annualized).
Changes to Investor’s Business Daily (IBD) Top 50 This Week:
IBD Underlying Updates July 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: ADBE, Auto-Trade, Bull Put Credit Spread, Credit Spreads, Portfolio, Profit, profits, Puts, Risk, Stocks vs. Stock Options, TastyWorks, Terry's Tips, thinkorswim, VIX, 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 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 »
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