On Friday’s Options Action, the crew analyzed the performance of financial stocks. Financials have traded lower for the past 5 months and continues to look weak as a sector. American Express (AXP) has been a bright spot in the sector, having performed better on a relative basis to financials and primed to break higher. Coupled with relatively cheap valulations, improving price action, suggests a possible beat on earnings. Expecting AXP to jump higher, Michael Khouw suggests buying a July 94/99/104 Call Spread Risk Vertical for a $1.00 Debit. As of Friday’s close, this spread is trading at $0.87.
We’ve structured this trade in OptionsPlay so you can analyze and view this trade along with the supporting technical chart at your convenience. You can also view the Options Action’s video by clicking on the following link: AXP Options Action