Midweek Options Review
We offered up a buffet of options choices yesterday, and two of our ideas panned out immediately, with our longer-term idea still needing some time to mature.
The ones that worked out without delay were the designated ideas from the DBI and CONN chains. They were the DBI 12/20 $17.50-15 Puts and the CONN 12/20 $17-15 Puts. Both of those were bearish signals on puts, and both yielded solid intraday results, good for opportunities to score the following daily gains:
Designer Brands, Inc. DBI 12/20 $17.50-15 Puts
$17.50 Puts – Range: 2.60-3.71 – Max Gain: 43%
$15 Puts – Range: .60-1.36 – Max Gain: 127%
Conn’s Inc. CONN 12/20 $17-15 Puts
$17 Puts – Range: 2.00-3.30 – Max Gain: 43%
$16 Puts – Range: 1.45-1.92 – Max Gain: 32%
$15 Puts – Range: .70-1.60 – Max Gain: 129%
HOME 03/20 $5.00-7.00 Calls
CHWY Weekly $25.50-26 Calls
PLCE Weekly $61-59 Puts
NVUS, TYHT, KNSA, CNST, BDSI, XBIT, QFIN
PCT Ltd. PCTL – Update –
We have taken a slight detour from our typical options and big-board-heavy focus to look back to the OTC Markets, where we used to make the bulk of our bread and butter, many years ago.
The lower exchanges are still good for speculative short term trading if you know where to look, and PCTL, which we initially tagged for observation first thing Monday morning, has now continued to move impressively through a second consecutive session. As we reported yesterday morning, on Monday the stock ran from .0089-.015 (+69%), but that was just the beginning.
We mentioned that crossing the barrier between subpenny and penny territory is a difficult thing for an OTC stock to do, and that it was an occurrence that warranted further attention in and of itself. We’re glad we didn’t let it slip off of our radars because PCTL added another huge performance yesterday. From a daily low of .0127 the stock shot to a new high of .0278! That represents an intraday gain of 119% and measured from our observed low on Monday, a total two-day increase of 212%
Tenet Healthcare Corp. THC – Fresh Options Idea –
We won’t ignore the options trading arena completely, with one idea in particular sticking out to us this morning. We are seeing some volatility arise as the stock is in a prime bottom-bounce position, and are going to want to track a couple of ideas through to the end of the week.
We are going to potentially target the THC Weekly $18-18.50 Calls, which will stand to perform well over the remaining three sessions of the week if it can begin to establish some momentum off of the bottom you can on the chart below.
CSTM, SDRL, ITCI, HOME, S, GHDX
We included a pair of options ideas in yesterday’s premarket report, and scored multi-bag hits on both accounts.
We were banking on a third straight bullish day for the markets with our SPY idea, and betting that the huge premarket gap-up on SFIX was unsustainable. In both cases we were correct, and it provided us with the following opportunities:
SPDR S&P500 ETF (SPY) Weekly $283-284 Calls
$283 Calls – Range: .98-2.81 – Max Gain: 187%
$284 Calls – Range: .57-2.00 – Max Gain: 251%
Today we will be looking to roll up our strike price on the SPY and tracking the SPY Weekly $285-286 Calls*.
Stitch Fix, Inc. SFIX Weekly $31-30 Puts
$30 Puts – Range: 1.40-3.22 – Max Gain: 130%
*Never trade weekly options on Friday, unless you are an advanced level trader with access to disposable funds!
At Home Group, Inc. HOME
HOME just missed on earnings and received an analyst downgrade, but on the hunch that the resultant gap-down was based on overreaction, we’re going to radar a set of contracts in the HOME chain to monitor in the event of a rebound. There is an enormous gap now sitting on the chart just waiting to be filled. We’ll have plenty of time to see that happen with the HOME 09/20 $8-10 Calls.
AMPG, FTD, SNY, RWLK, LJPC, HAIR