I just bought more PagSeguro Digital (PAGS) LEAPS.
On 11/11/19 I bought 10 PAGS 1/15/21 $35 C at $8.70. This is a LEAPS option which has well over a year before expiration. The stock has been moving up nicely since I bought this option but yesterday Cantor Fitzgerald throw a monkey wrench into my plan for PAGS by lowering it’s price target from $56 to $46. However leaves a rating of “Overweight” on the stock. At the close yesterday the stock was down $6.
Several other analysts have also recently weighed in on PAGS. HSBC raised PagSeguro Digital from a “hold” rating to a “buy” rating. Deutsche Bank raised their price target on PagSeguro Digital from $40.00 to $57.00 and gave the company a “buy” rating. KeyCorp lowered their price target on PagSeguro Digital from $60.00 to $45.00 and set an “overweight” rating on the stock. Evercore ISI lowered their price target on PagSeguro Digital from $65.00 to $56.00 and set an “outperform” rating on the stock.
These are only some of the analysts covering PAGS. PagSeguro Digital has a consensus rating of “Buy” and a consensus target price of $42.70. As I write the stocks at $31.
With the big drop in the stock I felt it was a good time to buy more options on a stock I like. Today I bought 10 more of the same LEAPS I already own.
Buy to Open 10 PAGS 1/15/21 $35.00 C @ $5.80 ($5800)
I now own 20 PAGS 1/15/21 $35 LEAPS at an average of price of $7.26. I’ll be looking to sell these LEAPS at a price of $9.26 for a $2000 profit. I feel between now and January of 2021 I’ll be able to grab a couple thousand dollars out of this position. Readers that follow my LEAPS positions know I don’t intend to hold this that long. When I buy options I buy LEAPS for protection. I plan on holding it until the middle of January 2020.
If you look at my “Current Position” page this position will be listed as one 20 contract position as below.
Buy to Open 20 PAGS 1/15/21 $35.00 C @ $7.26 ($14,520)
This is a Long option but a LEAPS. I like the stock and I like the analysts consensus. I give this trade a Risk Factor 3.
I received a few massages about my Advanced Micro Devices (AMD) Naked Call position. They wanted to know where I get my confidence from when I said the hottest stock on the market is gonna go down. So I sent a few emails out explaining my view. My main reason for thinking the stock is coming down in the crazy high RSI.
Today Northland Securities downgraded AMD from “Outperform” to “Market perform.” Analyst Gus Richard feels the stock price is now ahead of it’s fundamentals. But, even before his downgrade take a look at AMD’s candlestick for yesterday. It’s a Doji candle. I doji candlestick is a reversal signal.
As I write the stock is at $$39.40, down a little less than $2. The stock was also down yesterday. In no way do I think I’m out of the woods with my Rolled Out Naked Call, but it’s looking better. I have 10 Naked Calls with a Strike Price of $37.50 and it expires on 12/13. The stock still has to drop another $2 for me to get out of this position gone bad. If it does I’ll make a nice profit, if not I do another Roll Out. I have 23 days to go.
Successful trading,
Steve
The Options Coach