Weekend Trader Series
October 6, 2024
Open Positions Update
- Please extend the scheduled time-stop date on the Iron Mountain (IRM) November 15, 2024, 105-strike call to Monday, October 21.
- Close the NextEra Energy (NEE) January 17, 2025, 82.50-strike call on Monday, October 7. 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:
Toast Inc (TOST)Place a limit order to buy the Toast Inc (TOST) January 17, 2025 25-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 4, this option was offered around $5.45. TOST closed at $28.77 on Friday, October 4.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, October 28, close the position.
- If there is a change to the above closeout parameters, we will notify you in your regular Sunday evening communication.
Shares of cloud company Toast (TOST) bounced off of their 20-day moving average and gapped higher after Friday’s better-than-expected jobs report. The equity is trading well above $27.60, or double its November 2023 low, which is significant because this is a potential profit-taking level for traders anchoring to the low. Plus, the biggest open interest (OI) call strike just overhead expired, making the call wall smaller at our recommended strike.
Short interest is at an all-time high after adding more than 50% since May, and accounts for almost 10% of the stock’s total available float. Now that TOST is trading above its 12-mont range high of $27-$27.80, shorts are now in a losing trade and could move to cover.
Keep an eye on analyst sentiment as well. Even though Toast stock is up more than 56% since the start of the year, 13 of the 26 covering brokerages recommend a tepid “hold” or worse. An unwinding of this pessimism could fuel further gains.
Our recommended January 17, 2025 25-strike call has a leverage ratio of 4.1, and will double on a 24.6% rise in the underlying shares.
Most Recent Recommendations
The information contained herein is intended solely for the individual subscribers, is not intended for institutional investment organizations, and is not legal to be rebroadcast. Please click here for full disclaimer details.
Limitation on Schaeffer's Investment Research (SIR) liability: SIR liability, whether in contract, tort, negligence, or otherwise, shall be limited in the aggregate to direct and actual damages not to exceed the fees received by SIR from Subscriber. SIR will not be liable for consequential, incidental, punitive, special, exemplary or indirect damages resulting directly or indirectly from the use of or reliance upon any material provided by SIR. Without limitation, SIR shall not be responsible or liable for any loss or damages related to, either directly or indirectly, (1) any decline in market value or loss of any investment; (2) a subscriber's inability to use or any delay in accessing SIR website or any other source of material provided by SIR; (3) any absence of material on SIR website; (4) SIR failure to deliver or delay in delivering any material or (5) any kind of error in transmission of material. SIR and Subscriber acknowledge that, without limitation, the above-enumerated conditions cannot be the probable result of any breach of any agreement between SIR and Subscriber.