[Options] Kings of the Draft

Sean McLaughlin
June 28, 2023

[11/16: stop updated to 32]

If it ain't broke, don't fix it.

We've been witness to many charts, that look like today's setup, breaking out and turning into big winners in recent months. And with very few signs of this current bull market running out of steam, we think there will be many more repeats of these profitable patterns in the weeks and months ahead.

And cheap options premiums continue to make it advantageous to play these moves simply with long calls.

Strazza has been pounding the table on DraftKings for a couple weeks now and today's trading action has me convinced that the time is right to get involved.

First, the chart:

Today's trading action is taking $DKNG to and through the upper reaches of this "high and tight" we've been seeing in recent weeks.

Let's get aggressive and get after it!

Here's the Play:

I like betting on (see what I did there?) $DKNG December $35 calls for approximately $1.40 per contract.

This premium we pay today is the most we can lose if we're wrong. And as long as $DKNG stays above $24 per share, I'll continue to hold these calls. Any close below 24 and I'm out and will reevaluate for a new setup.

Call me crazy, but in this market with the price action we've been seeing in many charts that look like this, I think $DKNG can make a run back to $75 and beyond. So with this in mind, I'm putting these calls on and I intend to hold the entire position for this possibility. If $DKNG does in fact make it to $75, I'll then take half of my position off (at a huge profit), and hold the rest to see how long the tail can ride!

If you have any questions on this trade, please send them here.

ASO subscribers who missed last week’s video Jam Session where we reviewed activity in our options portfolio from the past week can catch it here.

~ @OptionsSean

P.S. We do trades like this regularly. If you'd like to leverage Best-in-Class technical analysis into smarter directional options trades, try out All Star Options Risk Free! Or give us a call to learn more: 323-421-7991.

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