May 28, 2024
Stock on Watch – ON Holding (ONON)
A theme that is sticking out in the retail space as of late is footwear, as Crocs (CROX) and Deckers Outdoors (DECK) are trading at new highs, and more recently ON Holding (ONON) has joined the party after an earnings beat two weeks ago.
Following that earnings beat, ONON stock has steadily made new highs, has received several upgrades from Wall Street research firms, and has attracted call buying, including this trade from last week:
Buyer of 6,500 ON Holding (ONON) June 41.5 Calls for $0.99 – Stock at 40.
This June call buyer is a small sample of the call buying I’ve picked up on in ONON recently, and that combined with the strong stock action and Wall Street upgrades makes ONON a top candidate to be added to the Cabot Options Trader portfolio should the market continue to strengthen.
May 28, 2024
Weekly Update
As I mentioned last week, this is a shorter version of the Weekly Review, focused on our open positions. Those are…
Cameco (CCJ) December 55 Calls, Freeport-McMoRan (FCX) November 46 Calls, Gold Miners ETF (GDX) January 33 Calls – I can pretty much bundle our CCJ, FCX and GDX trades into one description … after a big move higher in previous weeks, commodity stocks came under pressure late last week, though are bid higher this morning.
Stepping back, all look good, though as I’ve mentioned countless times, these stocks can get red hot, and then ice cold, very quickly.
Robinhood (HOOD) January 15 Call – HOOD continues to look great, and our position is now at a potential profit of approximately 160%. Also of note, option activity was red hot last week, including this trade from Friday:
Friday - Buyer of 6,000 Robinhood (HOOD) June 23 Calls for $0.60 – Stock at 20.
Marijuana ETF (MSOS) June 10 Covered Call – The MSOS had a bad week as the marijuana stocks came under pressure once again. Fortunately we had rolled our short call long before this weakness, and because of that we can withstand the recent decline.
Of note, the June 10 call that we sold for $0.76 is now worth $0.12 (good).
Novo Nordisk (NVO) September 135 Calls – NVO had another good week as the stock has been steadily rising since its short-lived earnings sell-off. Also, on Friday the company announced following a study its Ozempic drug slows the progression of chronic kidney disease and cuts the risk of kidney failure, heart attack, stroke and death in patients with Type 2 diabetes.
Palantir (PLTR) June 22 Covered Call – PLTR mostly chopped around last week, which is totally fine for our short volatility covered call trade. And as time decay hits our short call (good), the June 22 call that we sold for $0.99 is now worth $0.50.
Taiwan Semiconductor (TSM) September 130 Calls – TSM broke out to a new high last week following an earnings beat by “peer” NVDA. As I wrote on Friday, our September 130 call is now at a potential gain of approximately 150%.
Nasdaq ETF (QQQ) November 430 Puts – Not much new to add this week regarding our QQQ hedge that we will continue to hold just in case the market again weakens.
Walmart (WMT) January 65 Calls – WMT continued to slowly move to new highs last week and looks terrific. Also, option activity remains very bullish. Essentially, our trade is off to a good start.
Wells Fargo (WFC) December 62.5 Calls – WFC and its financial peers finally took a breather last week, potentially due to JPMorgan’s CEO Jamie Dimon saying his company wouldn’t be buying back much stock at these levels. Regardless, I continue to think WFC will move higher if the market remains in gear.
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