DailyPlay – Closing Trade (AMZN) and Portfolio Review – February 2, 2024

Closing Trade (updated pricing)

• AMZN – 112% Loss: Buy to Close 2 Contracts (or 100% of your Contracts) March 15th $160/$175 Call Vertical Spreads @ $8.67 Debit. DailyPlay Portfolio: By Closing both Contracts, we will be paying $17.34. We initially opened these 2 Contracts on Feb 1 @ $4.08 Credit. Our average loss, therefore, is $459 per contract. 

Investment Rationale

Yesterday afternoon provided investors with plenty of fireworks as 3 major tech companies reported earnings. We had two open positions that were reported after the close yesterday, AAPL and AMZN. Let’s first review the trade that did not move in the expected direction, AMZN. When an earnings trade proves your thesis incorrect, we must cut losses immediately and prevent any further downside. Our goal with the DailyPlay is to show you how to manage your positions to put yourself on the path of profitability. This entails ensuring losses remain small while seizing every opportunity to hit potential home runs. Our view on AAPL on the other hand has proven to be correct. It is trading near our lower strike price and presents an opportunity to add further exposure. We will update you with a closing price for the AMZN spread after the open and monitor the AAPL position for an opportunity to add more exposure. 

DailyPlay Portfolio Review

Our Trades

AAPL

Bearish Debit Spread. As expected, AAPL is pulling back from recent highs around $195. Positive earnings yesterday pushed the price of AAPL higher during the day, so we will closely monitor this trade to see if the pullback continues.

AMZN

Bearish Credit Spread. We are closing this position today. Please refer to the Investment Rationale for more information. 

JNJ

Long Call (bullish). JNJ dipped below $160 last week Friday and we will continue to monitor this position to see if it breaks over this level. We do see signs of a reversal higher with price-finding support at the $157 level. 

ORCL

Bullish Debit Spread. We rolled ORCL last week to extend our gains on this trade. We expect to see a continuation of its bullish trend. With 42 DTE, we will be keeping this trade open for now. 

RSP

Long-term play on the S&P Equal Weighted Index. Price consolidated in the last 2 weeks but showing bullish price action at the $155 level. We will continue to hold this position.