Call Buyers Profit in $LOW

Option call buyers banked a nice profit in Lowes(LOW) in 2 days.

In our TNT Option trading service we covered how Lowes(LOW) stock price was consolidating and setting up for a nice move.  We analyzed this stock on January 29th when the stock opened at $92.54 but traded up through our resistance line at $92.90,  After a quick retest of support, the stock closed near the high.  Wednesday brought additional buying.  This was also confirmed by looking at Home Depot(HD) stock price having the same price movement. The open on Wednesday in LOW gave us additional confirmation of higher prices as it took out Friday’s high and moved quickly towards the next swing high from January 18th of $95.03.  Thursday’s first hour of trading pushed the stock up to our second target of the 200 day simple moving average.  Once momentum died we issued an alert to take profits.

Options:

On Tuesday, option traders grabbed the 92.5 strike calls with the February 1st expiration.  These were trading around $1.4 with stock breaking the resistance level.  Thursday’s closing bid for these options were $3.65.  At the high of the day these traded up to $4.75.  If we take the closing bid price of $3.65 less our entry of $1.40 we get a profit of $2.25.  This is a percentage return of 260%.  Some of our traders played this a little more conservative and exited at the close of Wednesday with a option price around $3.00.  This is a percentage return of 214%.  One trader reported an even more conservative approach of rolling at Tuesday’s close into the $93.5 calls.  This trader reported a 85% return after they exited on Wednesday’s close.

So even with a variety of aggressiveness, option traders banked some nice profits in Lowes(LOW).

Congrats on the profits!

Join Ron Ianieri next week to analyze the next opportunity!