Rocket Equities & Options Friday Update 08-07-20
Friday, August 7th, 2020
Uber reported numbers last night and is trading slightly lower ahead of the open. We closed out option trade for a credit of about $165 last night, for a profit of about $98 per contract pair, or 146%.
Our option trade created a zone of value from $32.50 to $35.50 - and the stock traded to $34.71 prior to earnings last night. We would have been risking about $165 to make an additional $135 maximum if Uber closed above $35.50 today.
Factoring in the 16.5% rise Uber had since last Friday's low, and the non-farm payrolls number that came out this morning, it didn't make sense to hold through earnings.
We still have a nice start to our long term position in Uber at around $31.50.
We've had a nice start to this letter. All of the out-of-the-money options trades we make will not deliver huge profits like the first 2. Keep your risk vs reward in line as we move forward! Many times, we will lose our entire investment in some of these options trades so keep that in mind as we progress. There are lots of opportunities in this market with the VIX at 23 and uncertainty at historic levels.
If you have not exited the Uber option trade then close it on the open.
Stay tuned for an update this weekend - and the weekly report Monday!
If you still haven't gotten into any of our postions for the long-term portfolio, UBER, DIS, and STZ - you can still enter them with a half position at these levels. Disney has bounced dramatically, but we're still barely above the early June highs of $127.82. These positions will be many months or years long, and there is still substantial value in all of these stocks at these levels.
Uber earnings highlights:
Losses: $1.02 per share vs. 86 cents per share (adj.) expected
Revenue: $2.24 billon vs. $2.18 billion.
Rides (gross bookings): $3.05 billion vs. $3.47 billion expected
Eats (gross bookings): $6.96 billion vs. $6.57 billion expected, as per StreetAccount.
Long Term portfolio:
Long half a position in DIS at $118.63. Stop is $98.45.
Long half position in UBER at $31.50 or better. Stop is $26.24.
Long half position in STZ at $180.50. Stop is $164.05.
Short Term portfolio:
Long Uber call spread at net debit $67 - bought $32.50 Aug 7th call and sold $35.50 Aug 7th call. Closed this trade last night before the market close for a net credit of around $98 or a 146% profit.
Our option trade created a zone of value from $32.50 to $35.50 - and the stock traded to $34.71 prior to earnings last night. We would have been risking about $165 to make an additional $135 maximum if Uber closed above $35.50 today.
Factoring in the 16.5% rise Uber had since last Friday's low, and the non-farm payrolls number that came out this morning, it didn't make sense to hold through earnings.
We still have a nice start to our long term position in Uber at around $31.50.
We've had a nice start to this letter. All of the out-of-the-money options trades we make will not deliver huge profits like the first 2. Keep your risk vs reward in line as we move forward! Many times, we will lose our entire investment in some of these options trades so keep that in mind as we progress. There are lots of opportunities in this market with the VIX at 23 and uncertainty at historic levels.
If you have not exited the Uber option trade then close it on the open.
Stay tuned for an update this weekend - and the weekly report Monday!
If you still haven't gotten into any of our postions for the long-term portfolio, UBER, DIS, and STZ - you can still enter them with a half position at these levels. Disney has bounced dramatically, but we're still barely above the early June highs of $127.82. These positions will be many months or years long, and there is still substantial value in all of these stocks at these levels.
Uber earnings highlights:
Losses: $1.02 per share vs. 86 cents per share (adj.) expected
Revenue: $2.24 billon vs. $2.18 billion.
Rides (gross bookings): $3.05 billion vs. $3.47 billion expected
Eats (gross bookings): $6.96 billion vs. $6.57 billion expected, as per StreetAccount.
Long Term portfolio:
Long half a position in DIS at $118.63. Stop is $98.45.
Long half position in UBER at $31.50 or better. Stop is $26.24.
Long half position in STZ at $180.50. Stop is $164.05.
Short Term portfolio:
Long Uber call spread at net debit $67 - bought $32.50 Aug 7th call and sold $35.50 Aug 7th call. Closed this trade last night before the market close for a net credit of around $98 or a 146% profit.
Disney Daily
