Edition - iss-trading.com

1 optioneering newsletter October 28, 2018 Mini Dow Futures Monthly We trade with the trend and, as long as it s above the moving average line, the long-term trend is up. However, this month has been very weak, so we re going to review two bullish trades and two bearish trades. The first profit opportunity we will review this week is in STMP, or Inc. provides internet-based mailing and shipping services that allow small businesses, online retailers, and other organizations to print official United States Postal Service stamps and shipping labels with their computer, printer and an Internet connection. STMP Monthly STMP has fallen below the monthly moving average line, so the monthly trend in STMP is down. Whether it will occur or not remains to be seen, but there is plenty of room for a further decline.

2 STMP Daily WOW! STMP has fallen about $100 since August. And, as we said above, the monthly chart shows that there is plenty of room for a further decline. We are going to review a Put Debit Spread for STMP. Traders who want more leverage can buy STMP calls. STMP has options expiring every week until December 7th. After that, STMP has options expiring later in December, January, February, May, January 2020, and January 2021. Buy to Open STMP December 21st expiration 220-strike Put Sell to Open STMP December 21st expiration 200-strike Put We can see from the Call Option Spread Analysis Calculator if the STMP stock price is increases by 5%, stays where it is, or decreases in price when the options expire, the profit will be or $670.

3 If STMP increases by , the profit will be or $293. The next profit opportunity we will review is in AAPL, or Apple. Apple is probably best known for iPhones, laptops, iPads, and iTunes. However, Apple s product line and services are much broader and more diverse than that. AAPL Monthly The monthly chart shows that, except for one dip, AAPL has been in a strong bull trend since 2013. AAPL Daily AAPL hit another new record high this month. The pullback from the record high gives us a buying opportunity. We are going to review a Call Debit Spread for AAPL Traders who want to employ a more leveraged approach can buy AAPL calls. AAPL has options expiring every week until December 7th. After that, AAPL has options expiring later in December, January, February, April, June, January 2020, June 2020, and January 2021.

4 Buy to Open AAPL January 21st expiration 185-strike Call Sell to Open AAPL January 21st expiration 205-strike Call We can see from the Call Option Spread Analysis Calculator if the AAPL stock price is down -5%, stays where it is now, or increases in price when the options expire, the spread will make a or $465 profit. If AAPL is down when the options expire, the spread will lose or -$27. The next profit opportunity we will review this week is in SAGE, or Sage Therapeutics. Sage Therapeutics develops medicine that is intended to transform the lives of patients with life-altering central nervous system (CNS) disorders. SAGE Monthly Like STMP, SAGE is now in a bear trend on a monthly basis because the stock price is now below the monthly moving average line.

5 Also like STMP, there s plenty of room for a further decline. SAGE Daily SAGE went sideways for most of the year. Besides the fact that the long-term trend was up, it didn t really show it s hand until it began the current decline last month. We are going to review a put debit spread for SAGE. Traders who want a more leveraged approach could buy SAGE puts. SAGE has options expiring every week until December 7th. After that, there are options expiring later in December, January, February, May, and January 2020. Buy to Open SAGE December 21st expiration 135-Strike Put Sell to Open SAGE December 21st expiration 125-Strike Put We can see from the Call Option Spread Analysis Calculator that if the SAGE stock price increases by , stays the same as it is now, or decreases in price when the options expire, the spread will make a , or $435 profit.

6 If SAGE is up 5%, the profit will be or $240. If SAGE is up , the spread will lose or -$59. The last profit opportunity we will review is in CI, or Cigna. Cigna is an American worldwide health services organization. Its insurance subsidiaries are major providers of medical, dental, disability, life and accident insurance and related products and services, the majority of which are offered through employers and group insurance plans. Cigna also offers Medicare and Medicaid products and health, life and accident insurance coverages for individuals in the and selected international markets. CI Monthly The monthly chart shows that CI has been in a relatively steady and strong bull trend since 2012. Although it pulled back a little, unlike so many stocks, it hasn t even shown much weakness this month.

7 CI Daily No, CI hasn t declined much this month. However, it has pulled back enough to give us a buying opportunity. We are going to review a Call Debit Spread for CI. Traders who want to employ a more leveraged approach can buy CI calls. CI has options expiring every week until December 7th. After that, Ci has options expiring later in December, January, April, January 2020, and January 2021. Buy to Open CI January 21st 180-Strike Call Sell to Open CI January 21st 195-Strike Call We can see from the Call Option Spread Analysis Calculator that if the CI stock price declines by -5%, stays where it is, or increases in price when the options expire, the profit will be or $325. If CI is down , the spread will lose or -$56.

8 EARNINGS SEASON: There are four Earnings Seasons a year. The seasons begin in January, April, July, and October and they each last about two months. The earnings reports can have an impact on the stock price. We don t know if the impact is going to be positive or negative (or nothing at all). It s up to you to decide if you want to be in a trade when the earnings report is announced. Here s a link for a page that can help you keep track of the report dates: Note: Profit performance displayed in this newsletter does not include transaction costs. This newsletter includes some trading ideas following Chuck Hughes trading strategies along with educational information. For a complete listing of Chuck s exact trades, including specific entries and exits and real time Portfolio tracking, please call Brad at 1- 866-661-5664 or 310-647-5664