DKNG Breakout

Licia Leslie

Hey There Shoppers,

Where will you be this Thursday (tomorrow!) at happy hour?

Let me clue you in …

You’ll be joining Mark Sebastian and the rest of the Option Pit Team for an incredible live event starting at 7 p.m. EST.

Mark will reveal the ONE key factor that separates you from pro traders — and what you can do about it.

Option Pit Director of Education Andrew Giovinazzi — with thirty years of trading and training experience — will also be joining Mark.

AND look for some of the best trade ideas of the year, plus maybe some other special guests …

Seating is limited so sign up right now.

Once you have secured your spot …

Check out my trade idea in DraftKings (Ticker: DKNG) …

Bet on It

DraftKings (Ticker: DKNG) has been coiling (trading within a range) since Aug. 30 and finally broke out to the upside yesterday:

DKNG closed at $63.58 yesterday and I think it is going to make a run for $74.00.

Looking at the options, I like buying the Sept. 17 expiration cycle calls.

If DKNG opens and trades higher today, I will buy the Sept. 17 64-strike calls with an implied volatility of $42.95 and sell the Sept. 17 69-strike calls with an implied volatility of 50.38.

I will pay $1.15-$1.20 for this five-point spread with ten days until expiration.

If the spread trades down to $.80, I will take my losses. I will begin to take profits at $2.25 and higher.

Trade Review

- - My General Motors (Ticker: GM) Sept. 10 50-strike calls got away from me. I waited too long to bail and exited out of them down 80%. Stick to your stop-loss prices!! Not a smart move.
  - My iShares MSCI Japan ETF (Ticker: EWJ) calls were a big winner. The stock traded up to $70 on Thursday (which I called) — and even higher to close at $72.56 yesterday. I took my profits on those up 145%.
  - Over the long weekend, I recommended buying a call spread in PayPal (Ticker: PYPL). Yesterday, I paid $2.50 for the Sept. 10 290/300 call spread. It closed with a $3.80 bid so I will definitely be looking to exit today around $4.00.
  - I also recommended a put spread in Cassava Sciences (Ticker: SAVA), which did trade lower yesterday but the stock had gotten away from me and I did not execute a trade. I am a little leary of yesterday’s candle which could be an inverted hammer, meaning the stock may not go lower. I will watch it today and possibly buy a put spread in Sept. 17 cycle.
  - My last trade idea was buying puts outright in Alcoa (Ticker: AA), which opened higher but traded lower. If AA opens lower and trades lower today, I will pay up to $1.27 for the Sept. 17 46-strike puts.