Weekend Trader Series
October 13, 2024
Open Positions Update
• Please extend the scheduled time-stop date on the Merck (MRK) November 15, 2024, 125-strike put to Monday, October 28.
• Close the Nasdaq (NDAQ) December 20, 2024, 70-strike call on Monday, October 14. 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:
Fortinet (FTNT)Place a limit order to buy the Fortinet (FTNT) December 20, 2024 77.50-strike call at a limit price within range of the current market asked price when you place your order. At the close on Friday, October 11, this option was offered at around $8.85. FTNT closed at $82.87 on Friday, October 11.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, November 4, close the position.
- If there is a change to the above closeout parameters, we will notify you in your regular Sunday evening communication.
Software firm Fortinet (FTNT) yesterday saw a breakout from sideways action on the charts, followed by a move above its 2023 highs near $83. The stock also broke above the upper Bollinger band as well, whereas five of the past six such breakouts have been followed by positive price action over the next 21 days. This includes two double-digit pops.
Puts have been popular of late, with the stock’s 50-day put/call volume ratio of 1.02 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), ranking in the 93rd percentile of its annual range. There is also plenty of room for upgrades, and shorts have been in covering mode since the stock’s August more than three-year high.
Our recommended December 77.50 call has a leverage ratio of 6.7, and will double on a 14.9% rise in the underlying equity.
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