Dear Fellow Trader,
Happy Wonderful Wednesday!
As we land on midweek, remember to see to your own self-care in the midst of a busy trading week. Here’s a quick reminder from Wendy:
Being successful means a good many things, and most of them are misunderstood by a good many people whether this relates to option trading or some other endeavor. So, to clarify, here’s how I see “it” and you – Being successful means seeing yourself as already successful, not just trying to be successful; you are a creator, not just the created. You needn’t be saved, forgiven, or fixed. You’ve already changed the world and added to its brilliance. You are awesome. You have the ability to learn, apply and succeed at option trading or anything else you desire. Go for it. Look at you!
Market Snapshot:
The Dow Jones Industrial Average pared some early gains and was higher by 0.1% at 4 p.m. ET Wednesday. The S&P 500 gained 0.4%. The index claimed the psychologically important 4500 mark on Wednesday. The Nasdaq also rose by 0.5% at the closing bell. Volume was lower on the NYSE and on the Nasdaq compared with the same time on Tuesday. The small-cap Russell 2000 added 0.5% at the close.
Las Vegas Sands Corp. in the Spotlight
For today’s Trade of the Day, we will be looking at Las Vegas Sands Corp. (LVS).
Before analyzing LVS’s chart, let’s take a closer look at the company and its services.
Las Vegas Sands Corp., together with its subsidiaries, develops, owns, and operates integrated resorts in Asia and the United States. It owns and operates The Venetian Macao Resort Hotel, the Londoner Macao, The Parisian Macao, The Plaza Macao and Four Seasons Hotel Macao, Cotai Strip, and the Sands Macao in Macao, the People’s Republic of China; and Marina Bay Sands in Singapore. Las Vegas Sands Corp. was founded in 1988 and is based in Las Vegas, Nevada.
The chart of LVS below is a weekly chart with an ADX indicator at the bottom. The description coming up next explains how to use the ADX.
Average Direction Index (ADX) – Strength Indicator
The Average Directional Index consists of 3 lines: Green, Red and Black.
- Green = +DI (Bullish)
- Red = -DI (Bearish)
- Black = ADX Strength Line
The DI line that is on top is in control. If the ADX line is heading up, strength is supporting the DI line that is on top and in control.
Each candle on the chart represents price movement over a 5-day (week) period; therefore, it takes weeks for trades to play out. When the -DI crosses over the +DI line, it gives a buy signal for Puts as the -DI line (red) appears as if it is in control and rising to head up on the ADX indicator, and as the ADX turns up that is even more bearish, suggesting a downward move is gaining strength. When the +DI (green line) crosses the red and the black line points up it shows an upward trend and Calls can be considered.
Let’s look at LVS’s weekly chart.
The ADX -DI (red line) has crossed the +DI and the black ADX line is curling up. As long as the -DI is above the +DI, price should fall.
Potential LVS Trade
This signal could give a quick payout if it continues the upward move, and the strength of this pattern continues.
LVS costs about $42.62. If LVS’s price moves to $43 and the +DI (green line) crosses the -DI, and the black line is heading up, you could consider a Call trade. The short-term price target for LVS is $47 and then, perhaps, higher.
Reminder: We have been using weekly charts to smooth out the current volatility of the market and to provide you time to consider your trade.
Check Out How an Option Trade Could Pay Out Big Time
Option trading offers the potential of a lower initial investment and higher percentage gain. Let’s take a look and make a comparison.
To buy shares of LVS stock you would pay about $42.62. If price rose to $47 you would make about $4.38.
If you bought 1 Call option covering 100 shares of LVS with an Nov 18th expiration date for the 47 strike, the premium would be approximately $ 1.72 today, or $172 for 1 option. If price rose $4 over the next few weeks, the premium would likely increase $2.00, giving $200 profit on your $172 investment. This is a 116% gain.
Trading options is a win, win, win opportunity. Options often offer a smaller overall investment, covering more shares of stock and potential for greater profits.
I like to stress when trading options, you don’t need to wait for the expiration date to close the trade. You can close anywhere along the way prior to the expiration date. It is never a bad idea to take profit.
Trading options is like renting stocks for a fixed period of time. The potential to generate steady income with options is real, and it can be transforming. Depending on your trading experience and overall desires, you’ll find additional information on the Love Your Options website that will be helpful. (https://loveyouroptions.com/)
Routinely remind yourself – I believe in myself and my ability to succeed. I believe in an abundance of unlimited possibilities. The future will be awesome!
I wish you the very best,
Wendy
Past potential trade update:
Last week, we discussed buying NVAX puts. On 10-3 the premium for the 14 strike was $ 0.46. We will continue to monitor this trade.