Schaeffer's Expiration Week Countdown

Expiration Week Countdown for February 11, 2024

NOTE: This material should be read and understood before you decide to trade these recommendations, and before you determine the extent of your capital commitment.

Expiration Week Countdown will recommend options on 6 stocks that have the potential to make significant moves during front-month options expiration week, based on our Expectational Analysis® approach. This method incorporates a combination of sentiment, fundamental and technical drivers to identify situations that offer strong profit potential. Moreover, by utilizing options instead of a stock to leverage the anticipated move, a trader can enhance his/her returns and do this with minimum dollars at risk.

Our Expiration Week Countdown trades will be front-month call or put options targeting gains of 100%, 200%, or 300%. For each trade, we will provide a specific target profit, a brief description of the drivers underlying the recommendation, and an "optimal entry zone" defining a price range for the underlying stock within which we feel optimal results may be obtained.

Target profits for the 6 recommendations in our Expiration Week Countdown will fall into one of three categories: +100% (double the purchase price), +200% (triple the purchase price), or 300% (quadruple the purchase price.) Trades placed in the 100% target profit group can be viewed as "high profit/lower risk," while the 200% target profit group may be classified as "higher profit/higher risk." In this manner, we set ourselves up to achieve bigger gains when our risk of large losses is highest, and this assures us that risk and potential reward are properly aligned.

The "Optimal Entry Zone" provided for each trade describes a range of prices for the underlying stock at which we feel optimal results can be achieved. This zone should be considered a guideline for position entry. All Expiration Week Countdown trades should generally be entered on the first trading day after they are received, with respect to the parameters outlined by this Optimal Entry Zone.

Follow-up instructions will not be provided for trades in our Expiration Week Countdown service. We recommend that positions be closed at the first opportunity their stated target profit levels can be attained. All remaining open positions should be closed using market orders on the afternoon of their expiration date, as set forth below.

EWCB February 2024 Table

Please note: Please note: There is no implicit statement or assessment underlying those recommendations carrying 200% target profits to the effect that we find these situations to be more attractive or more compelling than those underlying the recommendations carrying 100% target profits, or that there is a greater degree of confidence on our part that those trades with profits targeted at 200% have enhanced chances for success. In fact, it is axiomatic that 200% targeted trades are inherently riskier than their 100% targeted counterparts, as it is almost always the case in options trading that higher potential profit is associated with greater levels of risk of loss (in particular a more elevated probability for so-called total losses). We highly recommend that you trade all six of our recommendations -- but if you choose to trade a lesser number, we'd strongly advise against any selection approach that inherently favors those recommendations carrying 200% target profits..

RECOMMENDATION: Place a market order to buy (to open) the Atlassian (TEAM) February 16, 2024 212.50-strike call. We recommend targeting a gain of 200% on the trade (3 times your purchase price), with the Optimal Entry Zone between $212.50 and $220.00. At the close on Friday, February 9, this option was offered at $8.90. TEAM closed at $218.76 on Friday, February 9.

CLOSEOUT INSTRUCTIONS: We recommend that positions be closed at the first opportunity their stated target profit levels can be attained. All remaining open positions should be closed using market orders on the afternoon of their respective expiration date.

Atlassian (TEAM): Software stock TEAM suffered a post-earnings pullback of 14.7% on Feb. 2, but held both its 80-day and 20-week moving averages. The shares recently reclaimed $215, a zone that has been a longer-term pivot level. Considering the company’s earnings did beat estimates, and there’s post-report support at August 2023 highs as well as the +20% year-to-date level, there’s reason to believe TEAM can rally again.

Wild-Card Factors: The shares recently touched – and bounced from -- a 50% Fibonacci retracement of its November lows and January highs.

The stock is also currently trading near peak put open interest (OI) at its 220-strike, and options are affordably priced, per TEAM’s Schaeffer’s Volatility Index (SVI) that sits in the 7th percentile of its annual range.

EWCB Feb TEAM


RECOMMENDATION: Place a market order to buy (to open) the Match Group (MTCH) February 16, 2024 36-strike put. We recommend targeting a gain of 300% on the trade (4 times your purchase price), with the Optimal Entry Zone between $34.50 and $36.50. At the close on Friday, February 9, this option was offered at $1.00. MTCH closed at $35.42 on Friday, February 9.

CLOSEOUT INSTRUCTIONS: We recommend that positions be closed at the first opportunity their stated target profit levels can be attained. All remaining open positions should be closed using market orders on the afternoon of their respective expiration date.

Match Group (MTCH): Dating app stock MTCH may face a rejection from overhead resistance at its 50-day moving average. The round-number $10 billion market cap level also sits overhead and coincides with three times the company’s initial public offering (IPO) price at $36.

Wild-Card Factors: There’s strong pessimism amongst analysts and short sellers; 16 of the 24 in coverage rate MTCH a “buy” or better with no “sells” on the books, while short interest is at its lowest level since September.

Call traders are equally as optimistic, per MTCH’s 50-day call/put volume ratio of 3.33 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio sits higher than 90% of all other readings from the past year, indicating a healthier than usual appetite for these bearish bets over bullish of late. Options are affordably priced, too, per the equity’s SVI sitting in the low 3rd percentile.

MTCH Feb EWCB


RECOMMENDATION: Place a market order to buy (to open) the NetApp (NTAP) February 16, 2024 90-strike call. We recommend targeting a gain of 300% on the trade (4 times your purchase price), with the Optimal Entry Zone between $88.00 and $92.00. At the close on Friday, February 9, this option was offered at $1.05. NTAP closed at $89.85 on Friday, February 9.

CLOSEOUT INSTRUCTIONS: We recommend that positions be closed at the first opportunity their stated target profit levels can be attained. All remaining open positions should be closed using market orders on the afternoon of their respective expiration date.

NetApp (NTAP): Software stock NTAP completed a 38% retracement of its late-October lows to its December highs, with additional support at its rising 20- and 50-day moving averages. Despite a 37% year-over-year lead, the shares are vulnerable to a shift in sentiment that could fuel additional gains.

Wild-Card Factors: Short interest is declining from its December peak, yet at the stock’s average pace of trading, it would still take four trading days for shorts to cover their bearish bets.

Of the 17 brokerages in coverage, 13 maintain “hold” or worse ratings. Options are an attractive route, per NTAP’s implied volatility (IV) for the February series lower than the 252-day historical volatility (HV).

EWCB Feb NTAP


RECOMMENDATION: Place a market order to buy (to open) the Seagate Technology (STX) February 16, 2024 88-strike call. We recommend targeting a gain of 300% on the trade (4 times your purchase price), with the Optimal Entry Zone between $87.50 and $90.00. At the close on Friday, February 9, this option was offered at $2.35. STX closed at $89.41 on Friday, February 9.

CLOSEOUT INSTRUCTIONS: We recommend that positions be closed at the first opportunity their stated target profit levels can be attained. All remaining open positions should be closed using market orders on the afternoon of their respective expiration date.

Seagate Technology (STX): STX held its 20-day moving average this week, while breaking above an hourly downtrend and pivot level around $87 that has been capping recent price action. Support is stepping up at the shares’ year-to-date breakeven and +20% year-over-year levels.

Wild-Card Factors: Short interest has fallen 14.2% over the last month, and with a 5.2% total available float still sold short, these bearish bettors could continue to cover, which provides ample tailwinds for STX.

The equity’s 10-day buy-to-open put/call volume ratio of 2.35 at the ISE, CBOE, and PHLX also leaves potential for an unwind. Digging deeper, peak put OI resides at the 90 strike, while the 95-strike call overhead could act as a magnet. Options are affordably priced per STX’s SVI sitting in the 9th percentile of its annual range.

EWCB Feb STX


RECOMMENDATION: Place a market order to buy (to open) the Tesla (TSLA) February 16, 2024 195-strike put. We recommend targeting a gain of 300% on the trade (4 times your purchase price), with the Optimal Entry Zone between $192.00 and $198.00. At the close on Friday, February 9, this option was offered at $4.95. TSLA closed at $193.57 on Friday, February 9.

CLOSEOUT INSTRUCTIONS: We recommend that positions be closed at the first opportunity their stated target profit levels can be attained. All remaining open positions should be closed using market orders on the afternoon of their respective expiration date.

Tesla (TSLA): TSLA’s recent rally is heading right into potential resistance at its declining 20-day moving average that also coincides with its October lows and the -20% year-to-date level. Already faced with a January downside earnings gap and down over 20% in 2024, there’s reason to believe a next leg lower is imminent.

Wild-Card Factors: Short interest is at its lowest point since August, a reflection of the optimism around the underperformer.

In the options pits, there’s stacked put open interest at the 185 strike in the February series all the way down to the 160 strike. Standard February expiries are priced at 38% volatility, lower than TSLA’s 20- and 250-day HV. Yet per the equity’s Schaeffer’s Volatility Scorecard (SVS) of 76, Tesla usually outperforms volatility expectations.

TSLA Feb EWCB


RECOMMENDATION: Place a market order to buy (to open) the Walgreens Boots Alliance (WBA) February 16, 2024 23-strike put. We recommend targeting a gain of 200% on the trade (3 times your purchase price), with the Optimal Entry Zone between $21.50 and $23.00. At the close on Friday, February 9, this option was offered at $1.13. WBA closed at $22.24 on Friday, February 9.

CLOSEOUT INSTRUCTIONS: We recommend that positions be closed at the first opportunity their stated target profit levels can be attained. All remaining open positions should be closed using market orders on the afternoon of their respective expiration date.

Walgreens Boots Alliance (WBA): WBA pushed below a downtrend on Friday, a break that could send the stock toward $20. The -10% year-to-date level has been rejecting recent price action, while the shares’ 20-day moving average is now crossing their longer-term 80-day moving average, a typically bearish signal.

Wild-Card Factors: The stock has also broken below its 200-unit moving average on the hourly chart.

Call traders are undeterred, per WBA’s 10-day buy-to-open call/put volume ratio of 5.15 at the ISE, CBOE, and PHLX that sits in the elevated 83rd percentile of its annual range. And with the security’s SVS checking in at 87, options betting on the next leg lower are the prudent move at the moment.

EWCB Feb WBA


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