The Superleverage Power of Call Options

Avengers Endgame poster

Avengers Endgame Chinese Poster h/t Disney/Marvel

Disney June $115 call

Options Hotline, March – April, 2019

The Superleverage Power of my method was on display this week, as Options Hotline subscribers multiplied their money with our call recommendation on shares of Walt Disney Co.

On Friday, DIS soared like Captain Marvel going full binary.  Following the unveiling of its streaming service, DIS rose 11% from the previous day.  This action helped shares reach our $130 per share price objective (see 03-10-19 Options Hotline and 04-12-19 Options Hotline Alert).

Our recommended DIS June $115 call, triggered 03-11-19 at $4.50, with DIS at $114, traded 04-12-19 at $17.00, with DIS at $130.  That’s +278% in a month, on a 14% move in the underlying shares, with an always known and strictly limited risk!

We’re always seeking to stay a step ahead of the crowd.  Here’s what it looks like on my daily candlestick chart for Disney:

Disney price chart

My daily candlestick chart for Disney, h/t stockcharts.com

So Sarnoff, what is Superleverage?

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Your Daily Bit of Wall Street Wit & Wisdom

Captain Marvel poster

h/t IMAX

“If you can dream it, you can do it.”
— Walt Disney

In Friday’s trading, Disney shares soared like Captain Marvel going full binary.

Shares gained 11% after Disney unveiled its streaming service.  That move helped the stock price reach our $130 per share objective.

I emailed Options Hotline subscribers a Profit Alert closing our recommended position in the DIS June $115 call, triggered 03-11-19 at $450 and closed 04-12-19 at $1,700, +278% in a month, with an always known and strictly limited risk!

That is the power of Superleverage on display.

Enjoy a super weekend!

Best regards,

Steve

Your Daily Bit of Wall Street Wit & Wisdom

Lyft IPO party

Lyft IPO party in Los Angeles, h/t Alex Welsh for the New York Times

“The chief losses to investors come from the purchase of low-quality securities at times of favorable conditions.”
— Benjamin Graham

Friday’s launch of trading in the Lyft IPO (initial public offering) made plenty of news.  What it didn’t make was money for those who bought at the open.  All those who clambered to get in on the action closed under water.

IPOs can be used as an exit strategy for business owners and early investors.

The ride-hailing company reported losses of $682 million in 2016, $688 million in $2017, and $911 million in 2018.  Lyft has cautioned that losses could mount as the company seeks international expansion.

IMO, zip your wallet.

Get where you want to go and enjoy your weekend!

Best regards,

Steve

Goodyear Deflated

Goodyear Blimp Deflated

Goodyear Blimp Deflated

Goodyear Tire issued an earnings warning and shares drove south.  Today the overall market extended its rally, albeit on light volume.  As I recently wrote, we may be approaching a turn.

When the market is up and the shares you’re watching are not, that is a sign of weakness.  The opposite is true, as well.  When individual shares are up in a down market, it’s a sign of their strength.

As you can see below, Goodyear literally left a skid mark on my daily candlestick chart.

Chart by Steven Sarnoff

Chart by Steven Sarnoff, h/t stockcharts.com

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Your Daily Bit of Wall Street Wit & Wisdom

Intelligence

Intelligence

“Wall Street people learn nothing and forget everything.”
— Benjamin Graham

Benjamin Graham is known as the “father of value investing.”  Two of his books merit inclusion in your library, Security Analysis (1934, written with David Dodd) and The Intelligent Investor (1949).

When asked about the accuracy, or lack thereof, of Wall Street forecasts, Graham reflected on his studies.  His results indicated you had the choice of tossing a coin and taking the consensus of expert opinion.

As to why that was, he answered that everybody in Wall Street was so smart that their brilliance offset each other, that all the information they know was already reflected in the level of stock prices, and consequently whatever happens in the future represents what they don’t know.

Gain some knowledge each day and use it.  It helps you stay a step ahead of the crowd.

Enjoy the rest of your weekend!

Best regards,

Steve

All ATwitter

Latest Options Hotline Reco, +42% In A Single Session

by Steven Sarnoff

This past Sunday, I emailed our great subscribers my Options Hotline bulletin.  As to the market I wrote, “We could see exaggerated swings in both directions…,” and recommended buying the Twitter January $32 call option for $1.90 or less good this week.  As usual, I included my Candlestick chart, info on support, resistance, price objective, and rationale for the reco.

When trading resumed, Trump’s tweets bout his lovely dinner in Argentina with Xi had Financial talking heads and buyers all atwitter.  Bulls ran the market up early on Monday, but reality ensued and stocks started to slip.  Twitter fared well and our entry price was not met.  The low trade in the option was $2.25.   Tuesday saw the option trade up to $3.30, before shares of the global self-expression platform declined with the overall market.  Sellers stepped up and buyers stood aside.  I only consider a recommendation triggered if it trades at or below our recommended price during the week.

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Printing Multiplier Profits In 3D

Printing Profits, Not Guns, in 3D

by Steven Sarnoff

OPTIONS HOTLINE Update, FYI: +241% in a month and a half on our recommended 3D ($DDD) calls. This morning, I sent a Profit Alert to our subscribers. 3D Systems Corp. is topping the market’s biggest gainers list, trading sharply higher following a Q2 earnings beat. While shorts are squeezed, as investors and analysts rush in, our great subscribers calmly book their gains. They are seeing their patience pay and their trade triple.

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Our Disney Trade On Ice

How Options Hotline subscribers are feeling this afternoon

by Steven Sarnoff

“It’s kind of fun to do the impossible.” — Walt Disney

OPTIONS HOTLINE Update, FYI: +125% in 2 weeks on less than a 5% move in Disney, with an always known and strictly limited risk!  This morning, ahead of an upcoming quarterly earnings report, I emailed a Profit Alert to my nimble #OptionsHotline subscribers.

They bought our recommended $DIS call at point A. and sold at point B. From 07-23-18 to 08-06-18, $DIS went from $111 to $116 and our option went from $200 to $450.

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Disney Has Spring In Its Step

by Steven Sarnoff

Shares of $DIS, the Walt Disney Co., closed today’s trading session around the high for the day and the week.  I view each day’s trading as a struggle, between buyers and sellers, for control of price direction.  This positive character of the behavior of price movement registered a strong red candle on my daily chart (see below).

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