I hope you all had a very Merry Christmas.
We are still in that holiday mood, i.e. we don’t want to think about anything serious.
Which we deserve, right?
After all, we’ve worked our butts off all year.
Plus it is healthy to take a break!
However, much like Christmas leftovers, I can’t get enough of profits!
Let’s look at a trade recap AND a new idea …
Just to recap what I have recommended for you recently in Profits in Pumps:
- In Pepsi (Ticker: PEP), I recommended buying puts after seeing a doji on December 16. PEP traded down $3.71 the very next day which I considered a firm confirmation. I bought the puts and PEP just proceeded to trade higher. The move lower was too short and the stock rebounded too quickly.
- In RIOT Blockchain (Ticker: RIOT), I recommended buying Dec. 31 24-strike calls on Dec. 22. I ended up paying $1.33 for these and I made it an official Option Shopper trade on Wednesday. I sold these out on Friday at $2.65 for a 99% return.
If you are an Option Shopper, you know that I have put out several trade “ideas,” meaning I have given you several stock chart readings on where I think the stocks are heading and you can decide on your option trade.
From the Options Shopper members’ page, which recapped our live Shopping Spree meeting on Tuesday, I wrote:
TUESDAY: Marathon Digital (Ticker: MARA) in the crypto space looks like a doji yesterday with a confirmation today. This stock is very volatile but I do like buying the Dec31 34/39 calls spread paying around $1.55. This is not an official trade.
THURSDAY: The MARA Dec31 34/39 call spread went out right around $3.00.
TUESDAY: General Motors (Ticker: GM) doji yesterday with confirmation today. I like buying the Dec31 55 calls.
THURSDAY: After closing at $54.79 on Tuesday, GM went out on Friday at $56.91, so those calls traded at least a dollar higher.
TUESDAY: UBER (Ticker: UBER) has had quite the run up and has closed the gap from 11/26/21 trading $42 today. Called it on Friday when it was trading $39. Not sure where from here.
THURSDAY: UBER traded a high of $44.35.
TUESDAY: Boeing (Ticker: BA) doji yesterday with a big move up today. Watch to go higher, possibly to $211.
THURSDAY: After closing at $199.52 on Tuesday, BA traded a high of $205.13 on Thursday. I do see resistance at this level.
A New Trade Idea
Being a “weird” week – meaning not a lot of volume and things can move easily or not move at all, I would look to do a quick-shot kind of trade.
I would buy something cheap on Monday, expiring on Friday.
So, looking at the SPDR S&P 500 (Ticker: SPY) chart, I am seeing wide range trading days at the top, which can mean it is too toppy and due for a pull back:
If SPY opens lower and trades lower tomorrow, I will buy the Dec. 31 470/460 put spread:
- The 470 puts are trading at an implied volatility of 11.05 and the 460 puts are trading at an implied vol of 14.42. That is some edge in my spread.
- I will pay up to $2.00 for this spread. I am looking for a quick move lower on this trade.
- I will take my loss if it trades below $1.40 and I will begin profit taking over $3.40.
Thanks for Reading … See You Next Tuesday!