By Dan Darrow

August 23, 2022

Today's Trade Ideas

Symbol: RUN

Style: Swing

Strategy: Call Spread


Long Oct21 $32.50 call

Short Oct21 $37.50 call

Action Area: $1.50 - $1.90

Comments: We are going to revisit a bullish trade on RUN. The big pop on the initial announcement of the Inflation Reduction Act led to a fast test of the 200day sma, and after a week of consolidation and a solid earnings report, the stock put together a large extension into the mid-30s that worked great for the bullish strategy at the time. Momentum has cooled across the Solar names, and RUN’s reversal lower over the past couple of sessions has put it back at the 200day sma and key recent support around 30. The high-participation breakout on RUN and now quick backtest is offering an interesting opportunity to step back in for a bullish swing trade, and the Oct21 call spread will be targeting an initial move to 33.50+ to begin locking in money. The trade will have a tight stop below 29 (under early August bull flag support) or a 40-50% net debit loss, whichever happens first. 

Symbol: FCX

Style: Swing

Strategy: Call Spread


Long Oct21 $33 call

Short Oct21 $37 call

Action Area: $1.10 - $1.45

Comments: FCX is a bullish trade idea. Copper (CPER) is attempting to turn the corner after a rough stretch earlier this Summer. The metal bottomed out in mid-July and has steadily recovered throughout August, with recent action forming a quick base around the 50day sma. FCX is a play on Copper, and it is also attempting to turn the corner following a two-week consolidating around the 50day sma. A strong session today put FCX solidly above that moving average, and a push past the top of recent resistance (~32) should start a near-term breakout on the stock. There is an unfilled gap from 6/21 at 34.03, and that will act as the initial target for the Oct21 call spread. The swing trade will have a tight stop below 29 or a 40-50% net debit loss, whichever happens first.

On The Radar

The big market event of the week will be Fed Chair Powell’s statement from the Jackson Hole conference on Friday morning (10:00 am ET). Recently, we have adjusted the QQQ and SPY hedges ahead of major economic or Fed-related events, but as of today, the hedges are in a good spot. The drop that started last week has the QQQ put spread in-the-money and the SPY hedge close-to-the-money, so there is no need to adjust them at the moment. If we see a sizable bounce (i.e. a rally to close Monday’s gap) before Friday morning, then we may take the opportunity to roll up the put spreads. 

LCID has spent back-to-back sessions this week dancing around 16. Friday’s breakdown led to continuation Monday, with the stock sliding into 16 late in the afternoon. It spent most of today in a tight range above the level, refusing to tick lower to send the Sep16 put spread roll down into the money. We watched the stock recover quickly a couple of weeks ago, and we will not let it come back on us again now that it has solidly broken lower. The plan will be to tighten the stop on the swing trade moving forward to 17. We will also be watching for a move to 15.75 to lock in more money.

Open Positions

* The following Open Positions pertain to the Options In Play trade ideas from this and previous editions. Disclosure of the Trader Co-Author’s actual portfolio holdings, as of the date of each publication, is made below under "Trader Author Portfolio Holdings.".

Trader Author Portfolio Holdings

**As of 4pm ET August 23, 2022