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 August 14th, 2023 Upward Breakout for IBKR Dear Reader, On Friday, we looked at a Daily Price Chart of Fortive Corp., noting that FTV stock has been making a series of new 52-Week Highs recently. For today's Trade of the Day e-letter we will be looking at a monthly chart for Interactive Brokers Group, Inc. stock symbol: IBKR. Before breaking down IBKR's monthly chart let's first review what products and services the company offers. Interactive Brokers Group, Inc. operates as an automated electronic broker worldwide. The company specializes in routing, executing, and processing trades in stocks, options, futures, foreign exchange instruments, bonds, mutual funds, exchange traded funds, metals, and cryptocurrencies. Now, let's begin to break down the monthly chart for IBKR stock. Below is a 10-Month Simple Moving Average chart for Interactive Brokers Group, Inc.  Buy IBKR Stock As the chart shows, in September, the IBKR 1-Month Price, crossed above the 10-Month simple moving average (SMA). This crossover indicated the buying pressure for IBKR stock exceeded the selling pressure. For this kind of crossover to occur, a stock has to be in a strong bullish uptrend. Now, as you can see, the 1-Month Price is still above the 10-Month SMA. That means the bullish trend is still in play! As long as the 1-Month price remains above the 10-Month SMA, the stock is more likely to keep trading at new highs and should be purchased. Our initial price target for IBKR is 98.50 per share.  117.2% Profit Potential for IBKR Option Now, since IBKR's 1-Month Price is trading above the 10-Month SMA this means the stock's bullish rally will likely continue. Let's use the Hughes Optioneering calculator to look at the potential returns for an IBKR call option purchase. The Call Option Calculator will calculate the profit/loss potential for a call option trade based on the price change of the underlying stock/ETF at option expiration in this example from a flat IBKR price to a 12.5% increase. The Optioneering Team uses the 1% Rule to select an option strike price with a higher percentage of winning trades. In the following IBKR option example, we used the 1% Rule to select the IBKR option strike price but out of fairness to our paid option service subscribers we don't list the strike price used in the profit/loss calculation. Trade with Higher Accuracy When you use the 1% Rule to select an IBKR in-the-money option strike price, IBKR stock only has to increase 1% for the option to breakeven and start profiting! Remember, if you purchase an at-the-money or out-of-the-money call option and the underlying stock closes flat at option expiration it will result in a 100% loss for your option trade! In this example, if IBKR stock is flat at 92.77 at option expiration, it will only result in a 1.0% loss for the IBKR option compared to a 100% loss for an at-the-money or out-of-the-money call option. Using the 1% Rule to select an option strike price can result in a higher percentage of winning trades compared to at-the-money or out-of-the-money call options. This higher accuracy can give you the discipline needed to become a successful option trader and can help avoid 100% losses when trading options. The goal of this example is to demonstrate the powerful profit potential available from trading options compared to stocks. The prices and returns represented below were calculated based on the current stock and option pricing for IBKR on 8/14/2023 before commissions. When you purchase a call option, there is no limit on the profit potential of the call if the underlying stock continues to move up in price. For this specific call option, the calculator analysis below reveals if IBKR stock increases 5.0% at option expiration to 97.41 (circled), the call option would make 58.1% before commission. If IBKR stock increases 10.0% at option expiration to 102.05 (circled), the call option would make 117.2% before commission and outperform the stock return nearly 12 to 1*. The leverage provided by call options allows you to maximize potential returns on bullish stocks. The Hughes Optioneering Team is here to help you identify profit opportunities 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. Brand-New Program from Chuck! Chuck Hughes has just launched his exciting new trading service program, Lightning Trade Alerts. This new service focuses on low-cost & short-term options trade. Members will receive hand-picked options trades from the 10-Time Trading Champion, Chuck Hughes. Call our team at 1-866-661-5664 or 1-310-647-5664 to join or CLICK HERE to schedule a call! Wishing You the Best in Investing Success,  Chuck Hughes Editor, Trade of the Day Have any questions? Email us at dailytrade@chuckstod.com *Trading incurs risk and some people lose money trading. 
See Related Articles on TradeWinsDaily.comGMS Continues its Trend to the Upside Possible Attractive Entry Point for HD  © 2023 Tradewins Publishing. All rights reserved. | Privacy Policy | Terms and Conditions | Contact Us If you didn't create an account using this email address, please ignore this email or unsubscribe To ensure delivery of this email to your inbox and to enable images to load in future mailings, please add todaystrade@chuckstod.com to your e-mail address book or safe senders list. DISCLAIMER: 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. 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. | |||
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