Weekend Trader Series
June 9, 2024
Open Positions Update
- The Boot Barn (BOOT) July 19, 2024, 110-strike call was closed after hitting its target profit of +100%. If you have not already done so, please close out of your BOOT position at the earliest opportunity.
The following is this week's recommendation:
Celestica (CLS)Place a limit order to buy the Celestica (CLS) September 20, 2024 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, June 7, this option was offered at $7.50. CLS closed at $52.25 on Friday, June 7.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, July 1, close the position.
- If there is a change to the above closeout parameters, we will notify you in your regular Sunday evening communication.
Supply chain stock Celestica (CLS) is a momentum name to keep an eye on, as it pulls back to its 30-day moving average and April highs just above the round $50 level. This pullback could be related to profit taking at the level that correspond with double the equity’s 2023 close, and an unwinding of long positions associated with June call open interest (OI) – especially the 55, 60, and 65 strikes. Much of this unwinding is likely over, and the option-related resistance will disappear with the June standard expiration.
Short interest surged 166% from January through April, but the shares rallied amid this build. It also looks like the perfect time to take advantage with options, as CLS’ implied volatility (IV) is in line with its 63-day historic volatility (HV).
Our recommended August 50 call has a leverage ratio of 4.4, and will double in a 24.5% pop in the underlying security.
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