Did you see TXT break through its 52-week high? This is a red hot alert for me and creates a set up that offers a lucrative opportunity.

Textron, Inc. (TXT) is a global multi-industry company that manufactures aircraft, automotive engine components and industrial tools. It also offers solutions and services for aircraft, fastening systems, and industrial products and components.

Now, let’s begin to break down the Daily Price chart for TXT shown below.

Buy TXT Stock

The Daily Price chart above shows that TXT stock has been hitting new 52-Week Highs regularly over the past week.

The Hughes Optioneering team looks for stocks that are making a series of 52-Week Highs as this is a good indicator that the stock is in a powerful uptrend.

Now, since TXT is currently making a series of new 52-Week Highs and will likely rally from here, let’s use the Hughes Optioneering calculator to look at the potential returns for a TXT call option spread.

The prices and returns represented below were calculated based on the current stock and option pricing for TXT on 3/7/2024 before commissions.

The analysis reveals that if TXT stock is flat or up at all at expiration the spread will realize a 69.5% return (circled). 

And if TXT stock decreases 7.5% at option expiration, the option spread would make a 69.5% return (circled). 

Due to option pricing characteristics, this option spread has a ‘built in’ 69.5% profit potential when the trade was identified*.

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Why I Trade Option Spreads

Option spread trades can result in a higher percentage of winning trades compared to a directional option trade if you can profit when the underlying stock/ETF is up, down or flat.

A higher percentage of winning trades can give you the discipline needed to become a successful trader. 

The Hughes Optioneering Team is here to help you identify profit opportunities just like this one. Stay posted for our next hot find!

Wishing You the Best in Investing Success,

Chuck Hughes

Editor, Trade of the Day

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*Trading incurs risk and some people lose money trading.