In today's Flow Show, I flew solo. But have no fear, I have a great idea to work with that was brought to me by the All Star Options community and endorsed by the analysts here at All Star Charts.
You can watch the full episode here:
Earlier in the day, Steve and I were together on a live twitter/X spaces and we were talking about the strength we're seeing in the payments space. Not just the Visas and Mastercards, but the Paypals, Venmos, and Squares.
Universally, we liked the $SQ chart. And my ASO community likes it too.
So here's the weekly $SQ chart that I shared in the show:
There's a lot of room for price action to go to retrace to all-time highs. But we don't need it to get there to earn a nice profit. If we only get halfway there, we can still win big.
Here's the Play:
I like buying $SQ June 125 calls for an approximately $4.50 net debit. With options volatility relatively cheap in this name, these calls are rather affordable in volatility terms.
During the show, I considered possibly selling some nearer-term calls against this position to lower my cost basis, but I've since decided I don't need to get cute. I don't want to hinder my chance of hitting a home run here.
That said, if $SQ loses the $82 level, I'll look to protect what's left of the premium in these options and exit the position. I'm either early or wrong, but the result is the same.
On the upside, if we do get the big rally I'm betting on, I'll sell half of my position if/when $SQ trades north of $125. This will likely lock in some gains, while leaving me exposed to further upside if it's in the offing.
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.
Sean McLaughlin | Chief Options Strategist, All Star Charts
