Power Plays Options
New Idea: DASH Call Spread
February 11, 2025
By Scott Redler
DoorDash (DASH) reports earnings after the close and I expect a surge higher afterwards.
So I am adding the following position to Power Plays Options:
- Long DASH February 21 $202.50 X $215 Call Spread
This spread looks good in the $2.75 to $3.50 area (or lower).
If you are not familiar with call spreads, this means:
- Buying DASH February 21 $202.50 Calls; and
- Selling an equal number of DASH February 21 $215 Calls
I am using call spreads because DASH options are fairly expensive, making it harder to earn a profit, even if the stock rises.
The maximum potential value of the spread would be $12.50 at expiration next Friday, and would be achieved if DASH is at $215 or higher. Of course, that's a big if!
Using spread caps my potential upside (if DASH zooms to $225 or $230, I might regret doing a spread!), but it also improves the overall risk profile of the position.
-Scott
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