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.
TD Ameritrade (AMTD): A Stable and Consistent Player
Several analysts have a bullish outlook for TD Ameritrade, here are two of them: TD Ameritrade Rating Reiterated by Goldman Sachs Group and TD Ameritrade PT Raised to $61.00
AMTD faced some volatile price action in February as the global equity markets fell under pressure and broadly corrected lower. In the past week, AMTD broke to a fresh 19 year high prior to pulling back. The bullish break is suggesting the stock has resumed higher within its broader uptrend while the pullback offers an entry point against support from the 20-period daily moving average.
AMTD Chart March 2018
If you agree there’s further upside ahead for TD Ameritrade, 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 AMTD 6APR18 54.5 Puts (AMTD180406P54.5)
Sell To Open AMTD 6APR18 57.5 Puts (AMTD180406P57.5) for a credit of $0.98 (selling a vertical)
This price was $0.02 less than the mid-point of the option spread when AMTD was trading near $57.50. Unless the stock rallies quickly from here, you should be able to get close to this amount.
If you use our favorite broker for this trade, tastyworks, your commission on this trade will only be $1 per opening contract ($2 per spread) (and there is no commission on closing trades, only the $.10 clearing fee). Each contract would then yield $0.96 and your broker would charge a $210 maintenance fee, making your investment $110 ($206 – $96). If AMTD closes at any price above $57.50 on April 6, both options would expire worthless, and your return on the spread would be 52% (597% annualized).
Changes to Investor’s Business Daily (IBD) Top 50 This Week:
IBD Underlying Updates March 1, 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
Raise more money (other people's money!) for your next real estate deal with the practical tips and techniques in this book! Are you ready to help other investors build their wealth while you build your real estate empire? The road map outl... read more
With a passion for helping others and a modern approach to sharing the oils, Sarah Harnisch made it to Platinum in Young Living in just 17 months. Now she’s sharing her strategy in this densely-packed guide to take you from starter kit to Sil... read more
If you will live like no one else, later you can live like no one else. Build up your money muscles with America's favorite finance coach. Okay, folks, do you want to turn those fat and flabby expenses into a well-toned budget? Do you want to... read more
Proven real estate strategies to retire early, escape the 9-to-5 work grind, and do more with your life!Are you stuck in the rut of a 9-to-5 job? Would you like to do more with your life than just work to pay the bills?Retire Early With Real ... read more
A National Bestseller"Chilling…Reads like a West Coast version of All the President’s Men." —The New York Times Book ReviewThe full inside story of the breathtaking rise and shocking collapse of Theranos, the multibillion-dollar biotech start... read more
Proven real estate strategies to retire early, escape the 9-to-5 work grind, and do more with your life! Are you stuck in the rut of a 9-to-5 job? Would you like to do more with your life than just work to pay the bills? Retire Early With Rea... 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
What if you had total control overyour hours and weekends?What if you didn’t have toanswer to anyone?What if you took control over your future?When you work for someone else, you don’t control your future. Your boss decides how much money you... read more
Written by a practicing emergency physician, The White Coat Investor is a high-yield manual that specifically deals with the financial issues facing medical students, residents, physicians, dentists, and similar high-income professionals... read more
The legendary investor shows how to identify and master the cycles that govern the markets.We all know markets rise and fall, but when should you pull out, and when should you stay in? The answer is never black or white, but is best re... read more