Weekend Trader Series
December 4, 2022
Open Positions Update
- The Crocs (CROX) January 20, 2023, 70-strike call was closed after hitting its target profit of +100%. If you have not already done so, please close out of your CROX position at the earliest opportunity.
The following is this week's recommendation:
Boeing (BA)Place a limit order to buy the Boeing (BA) February 17, 2023 175-strike call at a limit price within range of the current market asked price when you place your order. At the close on Friday, December 2, this option was offered at $19.05. BA closed at $182.87 on Friday, December 2.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 Tuesday, January 3, close the position.
- If there is a change to the above closeout parameters, we will notify you in your regular Sunday evening communication.
Between March and April, retail buyers bought Boeing (BA) at an average entry price of roughly $175, and now that the shares are above this region these traders are no longer at risk of selling at breakeven. In addition, the equity is now trading above two significant areas in the $172 and $174 levels, the former of which is a breakdown level from a trendline connecting June through August higher lows. Lastly
, Boeing stock also popped above its 320-day moving average, which acted as resistance in November. 
Short interest is up 25% since March, and most of the shorts who built positions during this period are now underwater. What's more, big January put open interest is just below current levels, and if BA remains above $175-$180 then tailwinds will appear as we near January expiration, and short interest related to those puts will begin to unwind.
Options traders are in luck. The equity's Schaeffer's Volatility Scorecard (SVS) ranks at 83 out of 100, indicating Boeing tends to outperform volatiltiy estimates, and its Implied Volatility (IV) stands at its lowest level in three months. our recommended April 175-strike call has a leverage ratio of 6.2, and will double in value on a 16.5% pop in the underlying shares.
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