Today, we are using some moving average filters to find bullish stocks and then looking at a couple of different trade ideas. First the stock scanner: More News from Barchart A screenshot of a computer screen Description automatically generated Which produces these results: Now that we have some bullish stock candidates, let’s analyze three different option ideas. Nike Covered Call The first trade we will look at is a Covered Call on Nike (NKE). First, let’s run our covered call screener:         ...

Core Insights - The market is showing encouraging signs, suggesting that bull put spread trades could perform well if the trend continues [1] Group 1: Bull Put Spread Overview - A bull put spread involves selling a naked put and buying a further out-of-the-money put to create a spread, which is considered less risky than a naked put due to capped losses [2] - These trades are characterized as short-term and high risk, suitable only for experienced option traders [2] Group 2: Apple (AAPL) Bull Put Spread Example - Apple (AAPL) is rated a 100% Buy and is currently above the 21, 50, and 200-day moving averages, indicating strength [3] - A bull put spread can be created by selling the December 19 put with a strike price of $275 and buying the $270 put, trading at around $0.89, which provides a premium of $89 and a maximum risk of $411 [3] - This trade represents a 21.65% return on risk if AAPL remains above $275 until December 19, with a breakeven point at $274.11 [4] Group 3: Alphabet (GOOGL) Bull Put Spread Example - Alphabet (GOOGL) stock is rated a 100% Buy and has a strengthening short-term outlook [6] - A bull put spread can be established by selling the December 19 put with a strike price of $300 and buying the $290 put, trading at around $1.08, which provides a premium of $108 and a maximum risk of $892 [7] - This trade represents a 12.11% return on risk if GOOGL remains above $300 until December 19, with a breakeven point at $298.92 [8]

Core Insights - The article discusses various income-generating options strategies, particularly focusing on covered calls, cash-secured puts, and bull put spreads as effective methods for investors to enhance returns [2][19]. Group 1: Covered Calls - A covered call strategy involves owning shares while selling call options, allowing investors to earn premium income and potentially improve annual returns [2]. - Since 2022, nearly 80 covered-call ETFs have been launched, attracting over $65 billion in investments, indicating strong interest in this strategy [2]. - The example of RTX shows that the share price was 1.31% out of the money (OTM) at the close, with a potential annualized return of 27.2% if the share price reaches the strike price of $175 at expiration [9][10]. Group 2: Cash-Secured Puts - Cash-secured puts involve selling put options while setting aside cash to buy shares if assigned, generally reflecting a bullish outlook [12]. - The example of Spotify's $520 put shows a volume of 964, with a profit probability of around 87% and an annualized return of 10.1% [15][17]. - The strategy allows investors to potentially acquire shares at a lower price while generating income from the premiums [12][18]. Group 3: Bull Put Spreads - A bull put spread consists of selling a short put option and buying a long put at a lower strike price, providing limited losses and profits [19]. - Pfizer's $23 put option had a high volume-to-open-interest ratio, suggesting significant interest, with potential combinations yielding net credits ranging from $14 to $160 [21][22]. - Selecting a short $26 put can lower potential loss by 17% while increasing the chance of success by 12%, demonstrating a strategic approach to risk management [24][25].

Core Viewpoint - Celestica (CLS) stock has shown a strong upward trend since April, making it a potential candidate for bullish option traders [1] Group 1: Trading Strategy - A bull put spread is recommended for traders looking to capitalize on Celestica's stock performance, which is a defined risk strategy [1][2] - The setup involves selling a higher strike put option while buying a lower strike put option within the same expiration cycle, allowing traders to receive an option premium [2] Group 2: Trade Setup Details - Traders anticipating that Celestica will remain above $210 can sell a Nov. 21 210-200 bull put spread for approximately $2.40, generating around $240 in premium with a maximum risk of $760 on a 100-share contract [3] - If the spread expires worthless, it would yield a 31% return in seven weeks, provided the stock stays above $210 at expiration [4] - The breakeven point for this trade is calculated at $207.60, which is 17.26% below the recent closing price [4] Group 3: Risk Management - It is advisable to set a stop loss if the stock falls below $220 or if the spread value increases from $2.40 to $4.80, to mitigate potential losses [5] Group 4: Company Overview - Celestica is recognized as one of the largest electronics manufacturing services companies, collaborating with major players in the computer and communications sectors [6] - The company provides comprehensive services, from printed circuit and system assembly to postproduction support, catering to both low-volume custom builds and high-volume commodity products [6][7] - Celestica has received high ratings from Investor's Business Daily, including a Composite Rating of 99, an Earnings Per Share Rating of 99, and a Relative Strength Rating of 98 [7]

Core Insights - The article discusses investment opportunities in Amazon (AMZN) and Palantir (PLTR) through bullish option strategies, specifically bull put spreads [3]. Group 1: Amazon - The bull put spread for Amazon involves selling the October expiry $220 strike put and buying the $215 strike put, resulting in a credit of approximately $0.87 or $87 per contract, which is the maximum possible gain [7]. - The maximum potential loss for this trade is calculated as $413, derived from the spread width minus the premium received [7]. - The return potential for this trade is 21.07%, with an estimated loss probability of 23.2%. The Barchart Technical Opinion rating for Amazon is a 100% Buy, indicating a strengthening short-term outlook [8]. Group 2: Palantir - The bull put spread for Palantir involves selling the October expiry $155 strike put and buying the $145 strike put, resulting in a credit of approximately $1.83 or $183 per contract, which is the maximum possible gain [10]. - The maximum potential loss for this trade is calculated as $817, based on the spread width minus the premium received [10]. - The return potential for this trade is 22.40%, with an estimated loss probability of 25.2%. The Barchart Technical Opinion rating for Palantir is an 80% Buy, with a weakening short-term outlook [12].