Trade Findings and Adjustments 09-07-2023
To Find Purpose, Follow Your Passion !!!
www.myhurleyinvestment.com Commentary for 9/5 talks about our awesome META bull Call trade most of us are currently in
Let’s talk about the Bull Call Strategy = Bullish trend
1st The Trend is your friend, check the indexes as well
2nd We want to capture a portion of the upward (bullish) movement without having to buy the stock and have a huge capital payment. Without having to purchase the stock
3rd We want a hedge in case we are wrong on future movement of the stock
4th Options are not dangerous, scary or foolish IF you know what you are doing
SO let’s talk bull call strategies today:
The thought process is a bullish trending stock
The long call is the profit making part of the trade
Long Call = The right to buy a stock at a certain price for a certain period of time – DEBIT
Time is our friend and we usually place this trade 90 days out in time
The short call is the hedge if we are wrong
Short Call – Obligated to sell the stock at a certain price for a certain period of time – CREDIT
So let’s first look at META –
Meta 300/315 Bull Call expiring in Dec 15. 2023
BTO 300 Long call , Sell to open the 315 short call
Net Debit 6.25 1 contract $625
Max Profit difference 300/315 = $15 – 6.25 = 8.75 or $875 profit 140% ROI or 1.4 rewards for 1 risk
WMT is in the bullish trend but at the top of the channel?
What do you do?= Put the trade on, Wait to put the trade on until it get back to the bottom of the channel, put just the long call on without the short, use the put for downside protection,
Place the trade but have cash available for dollar cost averaging twice
ITM Bull call 160/165 with WMT $163 = Cost 325 to make 175 1 risk for 0.53 rewards
OTM Bull call 165/170 for WMT @ $163 currently
Debit is $250 MAX Reward $250 a 1 to 1 risk to reward ratio, Cheaper than the ITM
IF I had $2500 I would place 3 contracts expecting the stock to fall to the bottom of the trend channel $159to157
The I would add 3 more contracts to Dollar Cost Average (DCA)
IF I guessed wrong at $155 I would add 4 more contracts and then STOP DCA because I don’t want to throw good money at bad
