Trade Alert: Top Names + China + 7777

Bullish options trades on a PA top name and on an undervalued China stock.

Two More Bullish Bets

We’ve had a bunch of new subscribers recently, so I should note that there is no set schedule for Trade Alert posts. I’m always looking for trade ideas, and when I find them, I place them and I post them. Some weeks I don’t see anything I like and I don’t post any (In those weeks, I’ll still put up a Top Names post, and an Exits post if we had any trade exits that week).

Today, we’ve got two trades: one is on a Portfolio Armor top name from last night, a popular AI name that has pulled back from its peak. The other is on a Chinese ADR that came up on our “7777” screen on Chartmill (Profitability, growth, health, and valuation ratings of 7 out of 10 or better). The Chinese stock has a valuation rating of 9.

For both stocks, we’re placing trades that expire after their next earnings releases. If we’re right, we could make about 200% on the PA top name and about 300% on the Chinese stock; if we’re wrong, we could lose 100% on each.

Details below.

Today’s Chinese Stock Trade

The stock is PDD Holdings (PDD 0.00%↑), and our trade is a vertical spread expiring on March 21st, buying the $118 strike calls and selling the $120 strike calls, for a net debit of $0.50. The max gain on 8 contracts is $1,200, the max loss is $400, and the break even is with PDD at $118.50. This trade hasn’t filled yet. The company reports earnings on March 18th, so if we don’t get a fill on this trade before then, we’ll cancel it.

Today’s Top Names Trade

The stock is Palantir Technologies (PLTR 0.00%↑), and our trade is a vertical spread expiring on May 16th, buying the $95 strike calls and selling the $100 strike calls for a net debit of $1.60. The max gain on 3 contracts is $1,020, the max loss is $480, and the break even is with PLTR at $96.60. This trade filled at $1.60.

Exiting These Trades

Assuming both of these trades fill, I’m going to place a GTC order to exit them at a net credit of about $1.95, and in the case of PDD, about $4.75. In both cases, I will lower those prices, if necessary, as we approach expiration.