DailyPlay – Closing Trades (AAPL, DIS) & Rolling Trade (DIS) & Portfolio Review – October 21, 2024

Closing Trades

• AAPL – 59% loss: Buy to Close 7 Contracts (or 100% of your Contracts) November 1 $225/$230 Call Vertical Spreads @ $3.77 Debit. DailyPlay Portfolio:  By Closing all 7 Contracts, we will pay $2,639. We initially opened these 7 Contracts on October 8 @ $2.38 Credit. Our loss on this trade, therefore, is $139 per Contract.
• DIS – 18% gain: Sell to Close 8 Contracts (or 100% of your Contracts) Oct 25/Nov 15 $95 Call Calendars @ $2.89 Credit. DailyPlay Portfolio:  By Closing all 8 Contracts, we will receive $2,312. We initially opened these 8 Contracts on October 11 @ $2.45 Debit. Our gain on this trade, therefore, is $352.

DIS Bullish Rolling/Closing & Opening Trade Signal

Investment Rationale

The Walt Disney Company (DIS): DIS recently broke out above its trading range, and we need to adjust our calendar spread. We are rolling our front-month October calls “up and out” from the $95 strike Calls to the November 8th $97 strike Calls. DIS will be reporting on November 14th, and our back-month options expire the day after the announcement.

By Rolling DIS we are Closing the existing trade and Opening a new one.

DIS – Daily

Trade Details

Strategy Details

Strategy: Long Call Calendar

Direction: Bullish Call Calendars

Details: Buy to Open 14 DIS Oct 25/Nov 8 $97 Call Calendar Spreads @ $1.44 Debit per Contract.

Total Risk: This trade has a max risk of $2,016 (14 Contracts x $144) based on a hypothetical $100,000 portfolio risking 2%. We suggest using 2% of your portfolio value and divide it by $144 to select the # contracts for your portfolio.

Trend Continuation Signal: This is a bullish trade on a stock that is expected to continue higher off recent support.

1M/6M Trends: Bullish/Neutral

Relative Strength: 2/10

OptionsPlay Score: 250

Stop Loss: @ $0.72 (50% loss of premium)

View DIS Trade

Entering the Trade

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

PLEASE NOTE that these prices are based on Friday’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. 

View DIS Trade

DailyPlay Portfolio Review

Our Trades

ABBV – 11 DTE

Bearish Puts – ABBV (AbbVie Inc.) drifted lower this past week. The anticipated earnings date is 10/30/24, and the gradual rise in implied volatility (IV) as earnings approach has kept our out-of-the-money November 1st put option in play. However, with only 11 days to expiration (DTE) and the stock not quite reaching the strike, it’s time to close the position.

ABNB – 11 DTE

Bullish Calls – Not much has changed with our Airbnb, Inc. (ABNB) position since we established it, apart from some initial strong momentum. With earnings scheduled for Thursday, October 30th, we are seeing a gradual increase in implied volatility (IV), which has impacted our Buy to Open 3 ABNB Nov 1st $133 Calls. Even though the stock remains stagnant, the rising IV continues to support our strategy. We plan to close the position before the earnings announcement, as we didn’t initiate the trade to take on the risk of the earnings event.

AKAM – 18 DTE

Bullish Calls – We are observing upside momentum building in Akamai Technologies (AKAM) following its recent breakout, and we currently hold a long call position, which is doing well. With 18 days to expiration (DTE) remaining and the upcoming earnings date on Thursday, November 7th, we anticipate an increase in implied volatility due to this known event, which should provide support and help justify our decision to stay the course for now.

BMY – 25 DTE

Bullish Calls – Bristol-Myers Squibb Co. (BMY) recently broke out above its trading range, and the upside momentum has continued. With the upcoming earnings announcement scheduled for before the market opens on October 31, 2024, we are observing a gradual increase in implied volatility due to this known event, which once again helps justify our decision to stay the course for now.

DIS – 4 DTE

Bullish Calendar Spreads – The Walt Disney Company (DIS): DIS recently broke out above its trading range, and we need to adjust our calendar spread. We are rolling our front-month October calls “up and out” from the $95 strike Calls to the November 8th $97 strike Calls. DIS will be reporting on November 14th, and our back-month options expire the day after the announcement.