Power Plays Bonus Options Idea: PINS
January 10, 2023
By Scott Redler
Power Plays was designed to be a stocks-only service, but I want to give you a bonus options idea in Pinterest (PINS) today.
It's been in a channel since September, and we could get resolution to the upside soon with the market acting better.
I believe PINS has the potential to break out to the $30 to $31 area, but the stock is shaky day-to-day. You could easily get stopped out right before a huge rally.
So I'd rather play it with a call spread, where the risk is the premium paid for the options.
This way, I know exactly what's at risk, and I can still benefit from the upside.
I'd look at these contracts for a call spread:
-Long PINS February 3 $26 call
-Short PINS February 3 $30 call
This spread is around $1.10 to $1.20 right now.
Reminder: with a call spread, you use an equal amount of contracts for each leg.
In the best-case scenario (a breakout over $30), the spread would be worth $4 at expiration.
Just keep in mind that the downside risk is 100% if PINS falls. So know what you're capable of handling.
Stay tuned for more updates.
Scott Redler Positions Disclosure as of 2023-01-10 at 10.20.02 AM