DailyPlay – Opening Trade (ARKK) – September 15, 2022

ARKK Bullish Opening Trade

View ARKK Trade

Strategy Details

Strategy: Long Call Vertical Spread

Direction: Bullish

Details: Buy to Open 8 Contracts November 18, 2022 $45/$54 Call Vertical Spreads @ $2.72 Debit.

Total Risk: This trade has a max risk of $2,176 (8 Contracts x $272).

Counter Trend Signal: This is a Bullish trade on a stock that is experiencing a bearish trend. 

1M/6M Trends: Neutral/Bearish

Technical Score: 3/10

OptionsPlay Score: 104

Entering the Trade

Use the following details to enter the trade on your trading platform. Please note that if there is a multi-leg option strategy, it should be entered as a single trade. 

Please note these prices are based on the previous day’s closing prices. Should the underlying move significantly during the pre-market hours, we will likely adjust the strikes and prices to reflect a more accurate trade entry. This will be reflected in the Portfolio tab within the OptionsPlay platform.

Investment Rationale

Despite the previous day’s heavy selloff, markets remained neutral today and held a major support level at the daily cloud bottom @ $3900. Despite the larger bearish backdrop, risk to rewards favor the upside at the moment unless we break below $3900, targeting $3825 to the downside. One name that has been making the news and crossed our scans last week is Cathie Wood’s ARKK. Printing a Weekly -13 Setup signals exhaustion to the downside and an opportunity to play for a bounce higher. It still sits below the weekly conversion line, but a break higher would target $54 weekly base line, roughly 20% higher. We are using this opportunity to play for a bounce in the markets with ARKK using a Call Debit Spread to reduce our overall risk in a bearish market.

Buy to Open Nov 18 $45/$54 Call Vertical @ $2.72 Debit

ARKK Trade Setup

ARKK – Weekly