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:
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.
As we very often do, we put forth some fresh options trading ideas for our report yesterday morning, and experienced good fortune with those as the session played out. Our ideas for both Dominos Pizza and eBay each panned out quite nicely, giving traders a solid chance at some serious multi-bag profits on the day.
Dominos Pizza, Inc. DPZ 05/17 $290-300 Calls
$290 Calls – Range: 6.43-16.75 – Max Gain: 160% $300 Calls – Range: 3.22-10.05 – Max Gain: 212%
Ebay, Inc. EBAY Weekly $37.50-38.50 Calls
$37.50 Calls – Range: .61-1.30 – Max Gain: 113% $386 Calls – Range: .33-.95 – Max Gain: 188% $38.50 Calls – Range: .18-.59 – Max Gain: 212%
FRESH OPTIONS IDEAS: Facebook, Inc. FB Weekly $195-200 Calls
Microsoft Corp. MSFT Weekly $129-132 Calls ServiceNow, Inc. NOW Weekly $255-257.50 Calls
Midatech Pharma plc MTP
Following its inclusion in our extended watchlist yesterday morning, MTP made a solid intraday run that we wanted to recap this morning. The stock traded in a range from a low of 2.95 on up to 3.86. That was good for total possible intraday gains of up to 31%
We’ll continue to keep an eye peeled for further gains on MTP, which recently surged to more than $10 just last month. The potential for the kind of extreme volatility we look for is certainly there.
As we near the midway point of this holiday-shortened week, we are going to be taking a look at a fresh earnings related options idea with UnitedHealth.
The company just posted an impressive across-the-board earnings beat, while the chart itself was already in a prime bottom-bounce position. We are going to track the UNH Weekly $232.50-237.50 Calls, which should be in very good shape if events play out as expected.
Fastenal, Inc. FAST
We also signaled the FAST 04/18 $62.50-67.50 Calls, last Thursday following the company’s own earnings beat. The moves we’ve observed since then have been moderate, but still impressive nonetheless.
$62.50 Calls – Range: 5.40-7.10 – Max Gain: 31% $65 Calls – Range: 2.40-4.80 – Max Gain: 100% $67.50 Calls – Range: 1.10-2.43 – Max Gain: 121%
We saw a very impressive new high for a stock that we’ve been tracking off of a bottom since February 8th. CPRX traded for as little as 2.36 that day, and has never looked back, spending most of the 7 weeks since then in a general uptrend that really kicked into high gear yesterday.
The stock ultimately reached 5.25 before closing just a penny below that point. That works out to an upswing of 122% in well under two months’ time.
Axsome Therapuetics, Inc. AXSM
Speaking of stock runners, we called out AXSM for observation just last Thursday, and wanted to drop back in on it to comment regarding its performance thus far. From a low of 11.75 on Thursday morning, the stock has now reached as high as 16.38. That’s a relatively modest but still very respectable gain of 39% in a span of just three sessions.
We focused on stocks quite a bit earlier on in the week, so this morning we wanted to take the opportunity to put another potential options play into the mix. We’re constantly looking for company’s that have just reported earnings, which gives us the potential for the volatility that we want.
In the case of ATVI, while its quarterly figures were lacking, the tock was at a bottom, and appears to want to go green today. We will put the ATVI Weekly $42-43.50 Calls on watch this morning, and monitor for the remainder of the week for a possible rebound off of what was its new 52-week low, registered on Monday.
SPDR S&P500 ETF (SPY)
Our regular readers are well aware of our fondness for the SPY ETF. We have taken advantage of it on many occasions. A quick peek into our archives reveals that today is the 114th time we’ve mentioned the SPY in our newsletters. It’s a well that we continue to draw from, with no indications of that ever changing.
Today, after such a big move yesterday wherein the SPY broke its 200DMA, we want to look for continuation of the bullish behavior we’re observing. We will designate the SPY Weekly $274.50-275.50 Calls as ones to watch as we head through this midweek.
Extended Watchlist: DBD, AVLR, FCX, ADOM, RWLK, YGYI, SN