Description
DHI has been working this descending channel since hitting an ATH in May of this year, and off the earnings we may be seeing a break out.
A close > 94 triggers a long.
Using a call debit spread, because profits are always limited by time.
Will look to enter at EOD.
Call Debit Spread
Tentative Levels on Chart
SL is a daily close back in the channel.
*Stops based off underlying stock price, not mark to market loss
The Trade
BUY
12/3 95C
SELL
12/3 105C
R/R & Break-evens vary on fill.
The long call is placed ITM due to limited strikes but also offers good downside protection.
The short call is placed at the ATH. If DHI runs to ATH and holds, I'll look to roll the spread up.
Manage Risk
Only invest what you are willing to lose
DHI has been working this descending channel since hitting an ATH in May of this year, and off the earnings we may be seeing a break out.
A close > 94 triggers a long.
Using a call debit spread, because profits are always limited by time.
Will look to enter at EOD.
Call Debit Spread
Tentative Levels on Chart
SL is a daily close back in the channel.
*Stops based off underlying stock price, not mark to market loss
The Trade
BUY
12/3 95C
SELL
12/3 105C
R/R & Break-evens vary on fill.
The long call is placed ITM due to limited strikes but also offers good downside protection.
The short call is placed at the ATH. If DHI runs to ATH and holds, I'll look to roll the spread up.
Manage Risk
Only invest what you are willing to lose
Trade active:
Went for the 11/19 96/105C's instead filled @ 2.4.
Max Loss < 96
Break-even @ 98.40
Max Profit > 105
Max Loss < 96
Break-even @ 98.40
Max Profit > 105
Trade active:
Increased position size by 60%.
Trade active:
Closed out the Increased portion @ +150%.
Trade closed manually:
Closed out the initial spread today because it expires tomorrow and will begin to trade at parity.
Filled @ 6.33, +164%.
The price target still has not been met, so I am looking to use profits to roll into next week OTM Calls.
Filled @ 6.33, +164%.
The price target still has not been met, so I am looking to use profits to roll into next week OTM Calls.
Trade active:
Filled 11/26 104C's (the initial price target), for .83.
Trade closed: target reached:
DHI hit the target today and retreated, so I went ahead and closed out the long calls.
Filled @ .97, +17%.
I will be looking for a break over the ATH @ 104 for additional upside.
Filled @ .97, +17%.
I will be looking for a break over the ATH @ 104 for additional upside.
