This week we are looking at another of the Investor’s Business Daily (IBD) Top 50 List companies. We use this list in one of our options portfolios to spot outperforming stocks and place option spreads that take advantage of the momentum.
Should You Buy The Dip in Dave & Buster’s (PLAY)?
Several analysts see Dave & Buster’s stock price continuing higher, here are two of them – Dave & Buster’s Entertainment Upgraded by Zacks Investment Research to “Buy” and Dave & Buster’s Entertainment Price Target Raised to $70.00.
From a technical perspective, PLAY is seen bouncing from a confluence of support derived from the 20-day moving average and a horizontal level at $62.50. Further support is seen slightly below the confluence area from a rising trendline that originates from a low posted in late July.
PLAY Chart October 2018
If you agree there’s further upside ahead for PLAY, consider this trade which is a bet that the stock will continue to advance over the next five weeks, or at least not decline very much.
Buy To Open PLAY 9NOV18 60 Puts (PLAY18119P60)
Sell To Open PLAY 9NOV18 63 Puts (PLAY18119P63) for a credit of $1.03 (selling a vertical)
This price was $0.02 less than the mid-point of the option spread when PLAY was trading near $64. Unless the stock rallies quickly from here, you should be able to get close to this amount.
Your commission on this trade will only be $2.50 per spread (the rate charged by thinkorswim for Terry’s Tips’ subscribers). Each contract would then yield $100.50 and your broker would charge a $300 maintenance fee, making your investment $199.50 ($300 – $100.50). If PLAY closes at any price above $63 on November 9, both options would expire worthless, and your return on the spread would be 50% (570% annualized).
Changes to Investor’s Business Daily (IBD) Top 50 This Week:
IBD Underlying Updates October 4, 2018
We have found that the Investor’s Business Daily Top 50 List has been a reliable source of stocks that are likely to move higher in the short run. Recent additions to the list might be particularly good choices for this strategy, and deletions might be good indicators for exiting a position that you might already have on that stock.
As with all investments, you should only make option trades with money that you can truly afford to lose.
Click Here For Original Source Of The Article
#1 New York Times Bestseller“Significant...The book is both instructive and surprisingly moving.” —The New York TimesRay Dalio, one of the world’s most successful investors and entrepreneurs, shares the unconventional principles that he’s dev... read more
April 2017 marks 20 years since Robert Kiyosaki’s Rich Dad Poor Dad first made waves in the Personal Finance arena.It has since become the #1 Personal Finance book of all time... translated into dozens of languages and sold around the ... read more
The bestselling The Millionaire Next Door identifies seven common traits that show up again and again among those who have accumulated wealth. Most of the truly wealthy in this country don't live in Beverly Hills or on Park Avenue-the... read more
Historically, dividend investing has been viewed as a way for risk-averse, “belt and suspenders” investors to invest in the stock market. Dividend investing is the best way to increase your income while also covering off on your retirement go... read more
From the number-one New York Times best-selling author of The 48 Laws of Power comes the definitive new audiobook on decoding the behavior of the people around you.
Robert Greene is a master guide for millions of listeners, distilling ancient... read more
Merger Masters presents revealing profiles of monumentally successful merger investors based on exclusive interviews with some of the greatest minds to practice the art of arbitrage. Michael Price, John Paulson, Paul Singer, and others offer ... read more
This classic text is annotated to update Graham's timeless wisdom for today's market conditions... The greatest investment advisor of the twentieth century, Benjamin Graham, taught and inspired people worldwide. Graham's philosophy of "value... read more
In The Book on Rental Property Investing, real estate investor and co-host of the BiggerPockets Podcast Brandon Turner has one goal in mind: to give you every strategy, tool, tip, and technique needed to become a millionaire rental property i... read more
NEW YORK TIMES BESTSELLER“After five decades of magisterial output, Doris Kearns Goodwin leads the league of presidential historians. Insight is her imprint.”—USA TODAY“A book like Leadership should help us raise our expectations of our natio... read more
New York Times
bestseller! More than Five million copies sold!
You CAN take control of your money. Build up your money muscles with America’s favorite finance coach.
... read more