Category: Trade ideas

Today’s trade idea for option traders: The Interpublic Group of Companies (trade closed)

Interpublic Group is an ad giant. The companies of the Group are specialized in all kinds of advertising, digital marketing, communications planning, media, public relations and so on. IPG’s revenue in the Q3 2020 demonstrated resilience in the face of the pandemic due to the steps taken to position the company as a strategic partner to its clients. And in the past days, the price of this stock knocked at the pre-pandemic level. Although there was a bounce, it could also be just a pullback. Therefore, this is giving an opportunity for a options trade. So let’s check it out, folks. Disclaimer:The information I am giving you in this article is for informative purposes only and should not be treated as investment advice. The information presented would not be suitable for investors who are not familiar with exchange traded options. Any readers interested in trading activities related to the information in this article should do their own research and seek advice from a licensed financial adviser. Type of a trade: Cash secured put (in the money)Alternatively: Bull put spreadExpiration: 19th February 2021 (42 days)Strike: $26Premium for 1 option: between $205 and $220 on the day this article was publishedMargin: apprx. $570 on the day this article was published Pros for this trade:– A long signal (I’m using the ADX-Indicator), giving a higher probability that the price will be pushed above the strike in the next 42 days– An extraordinary dividend of around 4.19% in case you get the stock assigned…

Today’s trade idea for option traders: Kimco Realty Corp. (trade closed)

Yes, because of COVID-19 it was a bad year for REITs. And Kimco Realty was also suffering from a roughly 28% decline. Of course, with around 400 shopping centers getting shut down and consumers increasingly buying online, it’s would be hard to make money in this business. Nevertheless, Kimco could collect around 90% of its October rent and thus, the revenue was down “just” 8% in the third quarter of 2020. And that was maybe the reason Kimco increased its dividend in the fourth quarter, just after the dividend cut in the third quarter. Of course, Kimco is facing a long recovery process now. It’s not only because of the Corona pandemic but also because of the headwinds from the online shopping which is, of course, a strong competitor of retail REITs. Therefore, long term-investors should be cautious with Kimco, too. But for all option traders who are usually short term oriented, there is an opportunity to sell options and collect a premium. So let’s check it out, folks.

Today’s trade idea for option traders: Sinclair Broadcast Group (trade closed)

When I introduced the trade from 12th November 2020, it could be closed 14 days later with a profit of $150 – 155$ per option. Today, there is another opportunity for a new options trade on Sinclair Broadcast Group. As the previous trade lies just a couple of weeks ago and there are no new earnings published, we have the same conditions: In spite of the negative earnings announcement in Q3 2020 (an operating loss of $4.18 B) there nevertheless comes a certain momentum upwards which gives to option traders an opportunity for a new trade on Sinclair Broadcast Group. So let’s check it out, folks.

Today’s trade idea for options traders: Pure Storage Inc. (trade closed)

Pure Storage delivers so-called All-Flash-Arrays (AFA) infrastructures and has an excellent reputation in this industry branch. The stock of this company is listed on the exchanges since 2015 and in total, it didn’t perform well. But now, from a point of view of a chart technique, this turns into a short-term opportunity for option traders. From a fundamental point of view, analysts expecting an increasing EPS of $0.26 in 2021 which should support the stock’s price. So let’s check this option trade opportunity, folks. Disclaimer:The information I am giving you in this article is for informative purposes only and should not be treated as investment advice. The information presented would not be suitable for investors who are not familiar with exchange traded options. Any readers interested in trading activities related to the information in this article should do their own research and seek advice from a licensed financial adviser. Type of a trade: Cash secured put (just a bit in the money)Alternatively: Bull put spreadExpiration: 19th February 2021 (64 days)Strike: $22.50Premium for 1 option: between $165 and $180 on the day this article was publishedMargin: apprx. $650 on the day this article was published Pros for this trade:– A long signal (I’m using the ADX-Indicator) is giving a higher probability that the price could be pushed over the strike and staying there in the next 64 days– December provides a statistical probability of the year-end rally and hence, higher to push the stock price to the out-of-the-money area– Positive fundamental…

Today’s trade idea for options traders: Wells Fargo (trade closed)

The financial sector has been beaten down in 2020, and Wells Fargo was not an exception at all. In fact, it has probably been hit harder than most banks in the U.S. And this is after already poor performance in its recent years of scandals. The most prominent case I still remember is the account fraud scandal which was made public in 2016. Longtime investor Warren Buffett has also significantly cut his position in the bank. But it’s still one of the largest financial institutions in the U.S. and is very well established, despite its past reputational issues. And as options traders usually look for short-term opportunities, they should take them. Therefore, let’s check this trade idea on Wells Fargo.