Optioneering Newsletter Sep 18

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Optioneering Newsletter

September 18, 2016

The Dow Monthly

The monthly trend is up and the long-term outlook is bullish. However,


there are always corrections along the way. The little pullback that has
occurred recently is expected to yield to a further advance.
The first profit opportunity we will review is in TQQQ, the ProShares
UltraPro QQQ. TQQQ seeks to yield results that correspond to three times
the daily performance of the QQQ.

TQQQ Monthly

After a pair of deep corrections that occurred last year and early this year,
TQQQ is on the verge of breaking out to a new record high. New record
highs are bullish.
TQQQ Daily

The daily chart shows that QQQ was very bullish from the June low to the
early August high. Then TQQQ went sideways for a few weeks. Now,
TQQQ appears be poised for a break through the month long flat top. An
upside breakout would point to a further advance.

TQQQ is a leveraged ETF. While leveraged ETFs contain more risk, they
usually possess higher premiums as a result. We suggest taking advantage
of the high premiums offered by initiating debit spreads.

Traders who want a more leveraged approach could consider buying


TQQQ calls. TQQQ has options expiring every week until October 28th.
After that, TQQQ has options expiring in November, December, January,
March, and January 2018.

Buy to Open TQQQ October 28th expiration 105-strike Call


Sell to Open TQQQ October 28 th expiration 118-strike Call

We can see from the Call Option Spread Analysis Calculator that if the
TQQQ ETF price declines by -5%, stays where it is, or increases in price
when the options expire, the spread will make a 27.5%, or $280 profit. If the
TQQQ ETF price is down -7.5% when the options expire, the spread will
lose -1.3%, or -$13.

The next profit opportunity we will review is in FB, or Facebook. Facebook


is the original, ground breaking social networking website. People use
Facebook to stay connected with friends and family, to discover what’s
going on in the world, and to share and express what matters to them.
FB Monthly

Facebook started trading in 2013. On the first day of trading it opened at


$42 and rose to $45. A few months later it fell below $20. Earlier this month
Facebook was over $130. That’s a strong bull trend!
FB Daily

The daily chart shows that FB has been very bullish since the June low.
The quick pullback from this month’s high gives us a new buying
opportunity.

We are going to review a Call Debit Spread for FB.

Traders who want a more leveraged approach could consider buying FB


calls. FB has options expiring every week until October 28h. After that, FB
has options expiring in November, December, January, February, March,
June, and January 2018.
Buy to Open FB November 18th expiration 110-strike Call
Sell to Open FB November 18th expiration 125-strike Call

We can see from the Call Option Spread Analysis Calculator that if the FB
stock price declines by -2.5%, stays where it is, or increases at all when the
options expire, the spread will make a 26.6% or $315 profit. If the FB stock
price is down -5% when the options expire, the spread will make 6.5% or
$77. If the FB stock price is down -7.5% when the options expire, the
spread lose -20.8% or -$246.

The next profit opportunity we will consider is AMZN, or Amazon.


Amazon is the largest Internet-based retailer in the United States. Like
Walmart, it sells almost everything, but you buy it on the internet and it is
shipped to you. Amazon also produces consumer electronics—notably,
Amazon Kindle e-book readers, Fire tablets, Fire TV and Fire Phone, and it
is the world's largest provider of cloud infrastructure services. Amazon has
separate retail websites for United States, United Kingdom & Ireland,
France, Canada, Germany, Italy, Spain, the Netherlands, Australia, Brazil,
Japan, China, India and Mexico. In 2015 Amazon surpassed Walmart as
the most valuable retailer in the United States by market capitalization.

AMZN Monthly

The monthly chart shows that AMZN has been in a strong bull trend since
the chart started in 2009. As you can see, it just hit a new record high this
month.
AMZN Daily

The daily chart shows that AMZN has been very strong since the April low.
When we enter bullish positions, we want to be long the strongest stocks.
Amazon is one of the strongest of all. The little pullback gives us a new
buying opportunity.

We are going to review a Call Debit Spread for AMZN.

Traders who want a more leveraged approach could consider buying


AMZN calls. AMZN has options expiring every week until October 28th.
After that, AMZN has options expiring in November, December, January,
February, April, June, January 2018, and January 2019.
Buy to Open AMZN November 18th expiration 700-strike Call
Sell to Open AMZN November 18th expiration 730-strike Call

We can see from the Call Option Spread Analysis Calculator that if the
AMZN stock price declines by -5%, stays where it is, or increases at all
when the options expire, the spread will make a 29%, or $675 profit. If the
AMZN stock price is down -7.5% when the options expire, the spread will
lose -13.4% or -$312.

The last profit opportunity we will consider this week is in Jack, or Jack in
the Box, Inc. Jack in the Box is a San Diego based restaurant company
that operates and franchises Jack in the Box restaurants, one of the
nation’s largest hamburger chains, with more than 2,200 restaurants in 21
states and Guam, and Qdoba Mexican Eats, a leader in fast-casual dining,
with more than 600 restaurants in 47 states, the District of Columbia and
Canada.
Jack Monthly

JACK went straight up from the 2011 low until the 2015 high. Then, in
August 2015, the bottom fell out and JACK experienced a very sharp drop.
After that, there was some base building and now we have a resurgent bull
trend with a new all-time high early this month.
JACK Daily

The daily chart shows that Jack has been very bullish since the May low.
The current pullback gives us a buying opportunity.

We are going to review a call debit spread for Jack.

Traders who want to employ a more leveraged approach can buy JACK
calls. JACK has options expiring in October, November, December, and
March.
Buy to Open JACK December 16th expiration 85-Strike Call
Sell to Open JACK December 16th expiration 95-Strike Call

We can see from the Call Option Spread Analysis Calculator that if the
JACK stock price declines by -2.5%, stays the same as it is now, or
increases in price at all at when the options expire, the spread will show a
profit of 35.1% or $260. If the JACK stock price is down -5% at expiration,
the spread will make a 26.7%, or $197 profit. If JACK is down
-7.5% when the options expire, the spread will lose -6.9% or -$51.

EARNINGS SEASON: There are four “Earnings Seasons” a year. The seasons begin in
January, April, July, and October and they each last about two months. The earnings
reports can have an impact on the stock price. We don’t know if the impact is going to
be positive or negative (or nothing at all). It’s up to you to decide if you want to be in a
trade when the earnings report is announced. Here’s a link for a page that can help you
keep track of the report dates:

https://www.earningswhispers.com/calendar
Note: Profit performance displayed in this newsletter does not include transaction
costs.

This newsletter includes some trading ideas following Chuck Hughes’ trading
strategies along with educational information. For a complete listing of Chuck’s
exact trades, including specific entries and exits and real time Portfolio tracking,
please call Brad at 1- 866-661-5664 or 310-647-5664

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