Trade Summary: May 15, 2017

| May 15, 2017

May 15, 2017

 

Trade Rationale

The markets are doing much of the same…

We were up… we were down… and now for the month of May, we are up again.

Start of a rally?  I’ve got no idea… I think we might be in a holding pattern for a few weeks here as the market digests all the political moves happening in Washington.  Add to that the low unemployment rates and potential for one or two more interest rate hikes by year end, and we have a stable outlook for the economy.

Unfortunately, stable means little movement… and that means little volatility.  

Remember, volatility is a big driver of options values.

So, we’re going to need to be all the more careful when selecting our trades this week.

We’ve rolled out a number of protective put trades in the last few weeks… and now we need to get long some options in case the market breaks to the upside.

Looking at the summer ahead, I see one area of activity that should move higher… the family vacation.

Summers are filled with family vacations and that means spending money on hotels and theme parks.  So that’s what we’re investing in!  

Let’s take advantage of the approaching economic wave…

Here are the trade ideas…

 

Trade Details

#1) Buy Six Flags Entertainment Corporation (SIX) Sep 15th $65 Calls up to $1.75

We’re watching for a continued rally in the stock. Exit for a profit if the stock runs to $65.50 or $67.  Conserve capital at $58 and $57.

Six Flags Entertainment

#2) Buy Hilton Worldwide Holdings Inc. (HLT) July 21st $65 Calls up to $1.25

If this stock continues to run higher, we should see it hit some milestones quickly.  Exit on the upside at $65 or $67.  For downside protection, exit at $59 or $58.

Hilton Worldwide Holdings

 

Category: AOA Trade Summary

Comments are closed.