✅ Bonus! Options Trade Idea for EXEL
Sunday New Picks (FULL Version)
Stock Watchlist Weekly Newsletter
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Options Bonus on Algo-Pick from Sunday, March 16th, 2025
NOT financial advice. Info for Education/Research/Entertainment purposes only.
🟢 The #1 algo-pick from yesterday’s issue was Exelixis Inc (EXEL); our friend Jim, The Option Professor of OptionProfessor.com has made his own analysis of this stock and below we are providing this bonus info for Stock Watchlist Weekly readers on how he might take an options trade on this stock currently.
Here's an Options Idea for This Week's Pick is a Long Strangle. What is a Long Strangle? In this case, it is the buying of a call option above the current price and buying a put option below current price
The risk is limited to the total amount of the strangle. It provides the right to buy at the strike price of the call and sell at the put strike price. This is an option strategy the seeks substantial volatility in the underlying stock before the expiration date
#1 Exelixis (EXEL) This biotech stock has run from $20 to as high as $40 in the last year. It is technically extended. A Reversion to the Mean is possible BUT the uptrend has been powerful. Due to the technical set up, volatile nature of biotech, and Earnings April 29. Here's a strangle. The Relative Strength Index (RSI) was 68 when EXEL hit $37 59 and was 60 when EXEL hit $40. This divergence suggests possible exhaustion.
IDEA-
Long May 16 EXEL 41 Call Option and Long a May 16 35 EXEL Put Option @ $298 approximate cost and total risk.
Risk-Reward- The risk (loss) is limited to $298 if EXEL closes between 41 and 35 on May 16. It is possible to trade the options independently.
The reward will be dependent on the volatility between now AND EXPIRATION (MAY 16). Since that is an unknown let's look at 30% Volatility
If EXEL rose 30% from current levels (36.65 X 30%= $47.64) the strangle would have intrinsic value ($47.64 minus 41 call strike price) of $664
If EXEL fell 30% from current levels (36.65 X 30%= $25.66) the strangle would have intrinsic value ($35 put strike price minus $25.66) of $934
REMEMBER- These are illustrative examples ONLY. There are many unknown outcomes. The options can be traded anytime until May 16.
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Thanks,
Jim, The Option Professor
REMEMBER All investing and option trading involves a substantial risk of loss and it is not right for everyone. CONSULT your brokerage firm to determine your own suitability and risk tolerance. Past performance is not indicative of future results. Information, ideas, and opinions are provided for informational purposes only. It is NOT advice.
📝 Reprint of the algo-pick data from yesterday’s issue:
💡 1) EXEL - Exelixis Inc
Basic Chart Analysis: EXEL has surged 59.21% over the past year, staying above both the 50-day and 200-day EMAs. The recent pullback from highs suggests consolidation, with RSI at 50 indicating neutral momentum. The stock remains in an uptrend as long as it holds above the 50-day EMA. A break below may signal further downside, while a rebound could push it to new highs.
Basic Company Description: Exelixis Inc is a biotechnology company focused on discovering, developing, and commercializing cancer therapies, including targeted treatments for various tumor types.
ETF Major Holders: IDNA, FBT, PBE
Sector: Health Care
Industry: Biotechnology
Market Cap: $10.26B
Dividend Yield: none
Exchange: NASDAQ
Security Price: $36.65
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