An Option Strategy in the Stock Market Today

Tom Gentile

Posted in
Daily Report

By: Tom Gentile
February 10th, 2022

3 mins read

A PB&J sandwich for many is a delicious and filling sandwich and here is an option strategy one can consider on a stock that specializes in the production of good old PB & J: Peanut Butter and Jelly.

The company is the J.M. Smucker Company and here’s to the prospect of this trade being just as delicious and filling… of cash in your pockets!

Of course, this ins not a recommendation as I am not a Registered Investment Advisor (RIA),  Instead it is an example of an option strategy that could profit if the stock moves higher by expiration (or in this case its earnings report).

If you find today’s stock market confusing with all its volatility, my intent is to help make some sense of how one can still potentially profit despite that.

New Opportunity for a Money Calendar Setup with a Start Date for Tomorrow (February 11, 2022)

The J. M. Smucker Company (NYSE: SJM)

Interesting at time to see what sector companies are classified as. SJM is classified as a Consumer Defensive. To me that means if the economy is deemed in rough shape and companies may face challenges moving their product the good thing about a SJM is people will still NEED their products.

It will be tough for folks to skimp on their favorite coffee, their kids peanut butter and jelly or their pet’s dog food.

I am not saying the economy is in bad shape, but I am showing you SJM has a bullish pattern that and thus a bullish option trade is going to be shown.

Here’s the Money Calendar data, which is the catalyst for the option trade that will follow. 

Sjm Report Feb 10 2022
Yearly Trade Results Feb 10 2022

Call Credit Spread — Here is a Call Debit Spread option trade for SJM:

This is where one could Buy to Open the Mar 18, 130/135, Call Debit Spread

Call Credit Spread Feb 10 2022

Normally, we buy debit spreads with an expiration just past the end date given from Money Calendar.

In this case, and often times when we are in earnings season, these patterns have end dates that are past an earnings announcement date. This one is Past the end date because, there are no weeklies for SJM, otherwise we would have chosen a Feb. options expiry.

Earnings are due out on SJM February 24, Before Market Open. Win, lose or draw, by the close of market the trading day before , Wednesday, February 23 it would be wise to close the trade – I would.

I’d love to show you another option trade of the Sell a Put Credit Spread variety, but what tends to happen going into an earnings report is the options IV will increase.

If we sold a put credit spread we would want to  buy that back ‘to close’ at a lesser price and with the prospects of IV increasing and that resulting in the option price increasing buying it back to close for a lesser price becomes more challenging. Let’s stick with this Call Debit Spread.

App: Toms Option Tools

Toms Option Tools scan the markets for bullish and bearish trade opportunities using our proprietary scans and strategy algorithms. TTR Darknet finds bullish entries based on triple stack channel collisions. Money Calendar identifies seasonal patterns with at least 90% accuracy looking back 10 years. Weekly Cash Clock finds short term opportunities that last a week on average. Microcurrency Trader applies Darknet technology and moving averages to cryptocurrencies. Velocity Trader utilizes volume spike and Velocity indicators on custom stock lists. Quantum Scripts scans the markets for momentum acceleration signals and employs Quantum noise filters. Optimal Trader finds directional pre-earnings opportunities that are optimized for entry date, stock movement, and volatility surge. My Trades tracks the profit/loss of your trades, displays stock charts and risk graphs, creates new trades, and edits existing trades. Morning Report provides top 10 option rankings in 6 categories each day.


Disclaimers

Stock and options trading has large potential rewards, but also large potential risk.

You must be aware of the risks and be willing to accept them in order to invest in the stock and options market. Do not trade with money you cannot afford to lose.

This is neither an offer to buy/sell/ or recommend a particular stock or option.

Hypothetical or simulated performance results have certain inherent limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been actually executed, the results may have under or overcompensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with hindsight.

No representation is being made that any account will or is likely to achieve profits or losses similar to those shown.

Disclaimer of Warranties and Liabilities Tom Gentile and TomsTradingRoom, LLC including employees, consultants, and editors (“Publisher”) cannot and do not warrant the completeness or accuracy of the content found in our areas, or its usefulness for any particular purpose.

Tom Gentile and TomsTradingRoom, LLC also make no promises that our content or the service itself will be delivered to you uninterrupted, timely, secure, or error-free. Under no circumstances will Tom Gentile and TomsTradingRoom, LLC be liable for direct, indirect, incidental, or any other type of damages resulting from your use or downloading of any content on our site.

This includes, but is in no way limited to, loss or injury caused in whole or in part by our negligence or by anything beyond our control in creating or delivering any portion of Tom Gentile and TomsTradingRoom, LLC.

You are agreeing that you bear responsibility for your own investment research and investment decisions. You also agree that Tom Gentile and TomsTradingRoom, LLC will not be liable for any I, investment decision made, or action taken by you, or others based upon reliance on news, information, or any other material published by Tom Gentile and TomsTradingRoom, LLC.

Tom Gentile and TomsTradingRoom, LLC relies on various sources of information that we believe to be accurate and reliable. However, we make no claims or representations as to the accuracy, completeness, or truth of any material contained on our site.

Tom Gentile and TomsTradingRoom, LLC are educational portals, providing content for educational and informational purposes only. Neither Tom Gentile nor TomsTradingRoom, LLC are a broker/dealer. Investors need a broker to trade stocks and options and must meet certain requirements. All securities, futures, and investments data and ideas are offered to self-directed investors. All prices in USD unless noted otherwise.

A full disclaimer can be found here:  http://www.tomgentile.com/legal_disclaimers.html.

Sign Up Now for Free Education!