Weekend Trader Series
July 28, 2024
Open Positions Update
- The GoDaddy (GDDY) October 18, 2024, 145-strike call reaches its time-stop on Monday, July 29. Close the position at a limit price within range of the current market price when you place the order.
- Close the Iris Energy (IREN) September 20, 2024, 10-strike call on Monday, July 29. Close the position at a limit price within the range of the current market price when you place the order.
The following is this week's recommendation:
Pultegroup (PHM)Place a limit order to buy the Pultegroup (PHM) October 18, 2024 125-strike call at a limit price within range of the current market asked price when you place your order. At the close on Friday, July 26, this option was offered at $11.60. PHM closed at $129.99 on Friday, July 26.Do not attempt to enter this position after Monday's close.Please use the following guidelines to manage the position:- Exit the position if the option is at a 100% gain from your entry price.
- If the option has not reached its target profit by 3:00 p.m. Eastern time on Monday, August 26, close the position.
- If there is a change to the above closeout parameters, we will notify you in your regular Sunday evening communication.
Homebuilding concern Pultegroup (PHM) saw a pre-earnings breakout above the area of its March through May resistance in the $120-$122 area. This is also the site of fresh all-time highs for the shares, while the equity’s post-earnings low stood at an area of resistance as recently as Tuesday. PHM is enjoying a positive reaction to the latest personal consumption expenditures (PCE) price index data, making now an ideal time to bet on calls.
There has also been a 60% build in short interest between mid-May and mid-July and now 3.3% of the stock’s total available float is sold short. Total call open interest (OI) on the stock ranks in the 9th annual percentile, too. Our recommended October 128 call sports a leverage ratio of 7.5, and will double in price on a 14% jump in the underlying security.
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