How To Make A Butterfly Take Flight Via Shares Of Home Depot

Core Viewpoint - Home Depot (HD) is identified as the most oversold stock in the Dow Jones Industrial Index, suggesting potential bullish opportunities through options trading [1] Group 1: Trading Strategy - A bullish butterfly spread is recommended as a low-cost strategy to gain exposure to Home Depot stock, targeting a price of $410 within the next few weeks [2] - The setup involves buying one Nov. 21, 400 call at $10.10, selling two Nov. 21, 410 calls at $6.40, and buying one Nov. 21, 420 call at $3.80, resulting in a total cost of approximately $110 per spread [3] - The maximum potential profit from this trade is $890, calculated by the width of the butterfly minus the premium paid, with break-even points at $401.10 and $418.90 [4] Group 2: Earnings and Ratings - Home Depot is scheduled to report earnings in mid-November, which introduces earnings risk if the trade is held until expiration [5] - Investor's Business Daily assigns Home Depot a Composite Rating of 52, an Earnings Per Share Rating of 52, and a Relative Strength Rating of 42, ranking second in the Retail/Wholesale-Building Products group [6]