Weekend Trader

Weekend Trader Series

April 14, 2024

Open Positions Update

  • The Marriott (MAR) June 21, 2024, 250-strike call reaches its time-stop this Monday, April 15. Close the position at a limit price within range of the current market price when you place the order

The following is this week's recommendation:

 Bill.com (BILL)

Place a limit order to buy the Bill.com (BILL) July 19, 2024 65-strike put at a limit price within range of the current market asked price when you place your order. At the close on Friday, April 12, this option was offered at $9.50. BILL closed at $61.66 on Friday, April 12.

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, April 29, close the position.
  • If there is a change to the above closeout parameters, we will notify you in your regular Sunday evening communication.
Software stock Bill.com (BILL) is trading below a trendline connecting higher lows since February, and earlier this month retested the level at which the breakdown of this trendline occurred. The equity also consolidated into its down-sloping 50-day moving average that is situated just below $67.90 -- half of its 52-week high. Adding to this weak technical setup, BILL gapped lower after the company's February earnings report and is now trading below $66, or triple its initial public offering (IPO).
An unwinding of analysts' optimism could pressure Bill.com stock lower. Of the 24 covering brokerages, 14 still rate the stock a "buy" or better despite double-digit deficits on both a year-to-date and year-over-year basis. What’s more, short interest has fallen 40% this year to a multi-year low. Despite the covering, the stock moved lower, flashing another sign of underlying weakness in the shares.

Call buyers have also been more bullish over the last two weeks, and a change in tune could provide additional headwinds. Our recommended July 65 put has a leverage ratio of 3.1, and will double in a 25.4% fall in the underlying shares.

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