[Options] The Hard Trade Can Drive Uber Gains

Sean McLaughlin
November 8, 2023

The market is speaking. It wants higher prices. The year-end, seasonality-driven rally may be taking hold. Or it may be something else? It doesn't really matter. We only follow price, and right now prices in certain stocks are pointing us to start taking some directional bets.

Today's trade is in an industry-disrupting name that has already had an impressive move over the past week that we feel is only the beginning of a much larger drive.

Check out this chart of everyone's favorite ride-hailing service Uber Technologies $UBER:

I classify this trade as "hard" right now for a couple of reasons that are apparent in this chart.

For one, short-term traders will blanche at buying right now, thinking they'd rather buy on a pullback. "It's already ripped for 10 straight days!" they'll say. Yes they will. So what?

Secondly, there is price memory just up ahead in the $52 area that acted as resistance in 2021. Yeah, so what?

This is what makes it hard. This is what will make the payout worth it if we're right.

Here's the Play:

I like buying $UBER March 60 calls for approximately $1.55 per contract. This premium I pay today is the most I lose if this trade doesn't work out, and I'll be sizing my position accordingly. My feeling is that if this trade doesn't work out, the options are basically a zero.

If $UBER should make a run above $64 per share, then I'll look to take a little off the table, but I'll still keep the bulk of my position on and hope that $UBER has booked me a ride on a rocket ship.

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

If you missed last week’s video Jam Session, you can catch a replay on Stock Market TV.

~ @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: 323-421-7910.

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