Yesterday, we looked at a Monthly Price Chart of Bank Of America Corp. noting the stock’s 1-Month Price is trading below the 10-Month SMA signaling a ‘Sell’.
For today’s Trade of the Day we will be looking at a Daily Price chart for Meridian Bioscience Inc. stock symbol: VIVO.
Before breaking down VIVO’s daily price chart let’s first review which products and services are offered by the company.
Meridian Bioscience, Inc., a life science company, develops, manufactures, distributes, and sells diagnostic test kits primarily for gastrointestinal and respiratory infectious diseases, and elevated blood lead levels worldwide. The company operates through Diagnostics and Life Science segments.
Now, let’s begin to break down the Daily Price chart for VIVO. Below is a Daily Price Chart with the price line displayed by an OHLC bar.
Buy VIVO Stock
The Daily Price chart above shows that VIVO stock has been hitting new 52-Week Highs regularly since late June.
Simply put, a stock does not just continually hit a series of new 52-Week Highs unless it is in a very strong bullish trend.
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.
You see, after a stock makes a series of two or more 52-Week Highs, the stock typically continues its price uptrend and should be purchased.
Our initial price target for VIVO stock is 35.25 per share.
Profit if VIVO Is Down 10%
Now, since VIVO is currently making a series of 52-Week Highs and will likely rally from here, let’s use the Optioneering calculator to look at the potential returns for a VIVO covered call trade. Covered calls are also known as buy writes.
The Buy Write Calculator will calculate the profit/loss potential for a covered call trade based on the price change of the underlying stock/ETF at option expiration in this example from a 10.0% increase to a 10.0% decrease in VIVO stock at option expiration.
The goal of this example is to demonstrate the ‘built in’ profit potential for covered calls and the ability of covered calls to profit if the underlying stock is up, down or flat at option expiration. Out of fairness to our paid option service subscribers we don’t list the option strike price used in the profit/loss calculation.
The prices and returns represented below were calculated based on the current stock and option pricing for VIVO on 7/6/2022 before commissions.
Built in Profit Potential
For this covered call, the calculator analysis below reveals the cost or the breakeven price is $2,800 (circled). The maximum risk for a covered call is the cost of the covered call.
The analysis reveals that if VIVO is flat at 33.55 at expiration the covered call will realize a $555.00 profit and a 19.8% return (circled).
If VIVO increases 10.0% at option expiration, the covered call will realize a $700.00 profit and a 25.0% return.
And if VIVO decreases 10.0% at option expiration, the covered call will realize a $219.50 profit and a 7.8% return.
Due to option pricing characteristics, this covered call has a ‘built in’ 19.8% profit potential when the trade was initiated.
Covered call trades can result in a higher percentage of winning trades compared to a directional stock 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 Optioneering Team is here to help you identify winning trades just like this one.
Interested in accessing the Optioneering Calculators? Join one of Chuck’s Trading Services for unlimited access! The Optioneering Team has option calculators for six different option strategies that allow you to calculate the profit potential for an option trade before you take the trade.
Average Trade Return of 196.9%
Below is a screenshot of the current open trade profit opportunities for covered call trades from Chuck’s Weekly Option Alert Covered Call Portfolios. There are currently $104,325.00 in open trade profits with an average trade return of 196.9% demonstrating the ability of the Optioneering Strategy to deliver substantial returns with no losing trades*.
Hughes Optioneering Strategies Perform In All Markets
This isn’t Chuck’s first bear market…
Over the past 20+ years, Chuck’s strategies have proven to perform, even in the most volatile markets.
His strategies championed market corrections, the Dot-Com Crash, and the 2008 Great Recession*.
This is your chance to gain access to his proven strategies and start receiving hand-picked trades from 10-Time Trading Champion!
Just call Brad at 1-866-661-5664 or 1-310-647-5664 to join and use the code “Optioneering VIP” to receive special pricing.
You can also CLICK HERE to schedule a call!
Wishing You the Best in Investing Success,
Editor, Trade of the Day
Have any questions? Email us at firstname.lastname@example.org
*Trading incurs risk and you may lose money trading. Past performance does not necessarily predict future results. Member profits and losses are not tracked. Profit potential is taken from results of signaled trades, not actual member results. Not all members make the trades. Open trade profit results represent the open trade profit potential for the portfolio displayed on the day the snapshot was taken. Open trade profits may have increased or decreased when trades were closed out.
DISCLAIMER: The information provided by the Legacy Publishing LLC (“Legacy”) Trading Services, newsletters and educational publications (“Services”) is not customized or personalized to any particular risk profile or tolerance. Nor is the information published by Legacy a customized or personalized recommendation to buy, sell, hold, or invest in particular financial products. Past performance is not necessarily indicative of future results. Please note that results may not be typical and can vary from person to person. There are inherent risks involved with investing in the stock and options market, including the loss of your investment. Any investment is at your own risk. You should only trade or invest your “risk capital” – money you can afford to lose. Trading stocks and stock options involves high risk, and you can lose the entire principal amount invested or more. There is no guarantee that systems, indicators, or trading signals will result in profits or that they will not produce losses. Chuck Hughes’ profit results are not typical. Chuck Hughes is an experienced investor, and your results will vary depending on risk tolerance, amount of risk capital utilized, size of trading position, willingness to follow the rules and other factors. The actual profit results presented here may vary with the actual profit results presented in other Legacy publications due to the different strategies and time frames presented in other publications. Trading on margin carries a high level of risk and may not be suitable for all investors. Other than the refund policy detailed elsewhere, Legacy does not make any guarantee or other promise as to any results that may be obtained from using the Services. Open trade profit snapshots of Chuck Hughes’ trading accounts represent the open trade profit performance for the trade(s) or the portfolio displayed on the day the snapshot was taken. Open trade profits may have increased or decreased when trades were closed out. Other strategies may not have been profitable during the same time period the open trade profits were displayed. In order to avoid a conflict of interest, Trading Service recommendations were not executed by Chuck Hughes or his associates. The trade entry and exit prices (and resulting profit/loss) represent the price of the security at the time the recommendation was disseminated. Trading Service profits are not based on actual trades and have certain limitations. Because the Trading Service trades have not actually been executed, the results may understate or overstate the impact of certain market factors, such as lack of liquidity. Also, the Trading Service results do not include the costs of subscriptions, commissions, or other fees. No representation is being made that you will achieve profits or the same results as any person providing a testimonial. Testimonials may relate to various other products offered by Legacy Publishing and not the product offered here, but all of these products are based on Chuck Hughes’ system. Performance results of other products described in such testimonials may be different from results for the product being offered and may have been achieved before the product being offered was developed. Results described in testimonials from other products or the product being offered may not be typical or representative of results achieved by other users of such products. No representation is being made that any of the persons who provide testimonials have continued to experience the same level of profitable trading after the date on which the testimonial was provided. In fact, such persons may have experienced losses thereafter or may have experienced losses preceding the period of time referenced in the testimonial. Cash Payout trades receive cash credits from the sale of option premiums. The net profits for Cash Payout trades may be less than the cash received for the sale of the option premium. Some cash income figures presented represent the total amount of option premium collected during the referenced period. Actual profits were less. Auto-trading, or any broker or advisor-directed type of trading, is not supported or endorsed by Legacy Publishing LLC. For additional information on auto-trading, you may visit the SEC’s website: All About Auto-Trading, https://www.sec.gov/reportspubs/investor-publications/investorpubsautotradinghtm.html