As we navigate the ebbs and flows of the financial markets, it’s crucial for investors to keep an eye on stocks that exhibit potential for significant movements. In this article for “Traders on Trend,” we delve into four stocks that US investors should monitor in February 2024. Remember, this is not personal financial advice, and consultation with a professional is recommended before making investment decisions.

1. Enphase Energy (ENPH)

Enphase Energy, a key player in the green energy sector, has been the subject of investor attention. Currently trading at $107.27, it marks a significant decline from its 2024 opening price. Despite this downturn, Enphase has maintained a streak of positive net income in its recent quarterly reports.

The company’s high IVR indicates that premiums are costly, benefiting those selling premium. With a variety of strategies like 13-delta strangles and defined risk spreads, investors have diverse options to navigate ENPH’s volatility. As the earnings announcement looms, potential shifts in IVR warrant close observation

2. DraftKings (DKNG)

DraftKings stands out in the digital sports entertainment and gaming landscape. Despite not reporting positive net income in its last five quarterly reports, DKNG shows a promising uptrend in its stock price. The current trading price of $38.94 reflects a substantial increase from its 2024 opening.

Investors with small to medium-sized portfolios might find opportunities in undefined risk positions given DKNG’s affordability. Strategies such as 18-delta short strangles or 24-delta short iron condors could be effective. The discrepancy in volatility between February and March contracts also opens avenues for calendarized spreads.

3. Square (SQ)

Square, a major player in financial services and mobile payment, currently trades at $67.85. This figure represents a decline from its opening price in 2024, and like DKNG, SQ hasn’t reported positive net income in its recent quarterly reports.

SQ’s liquidity and the setup for an 18-delta short strangle are points of interest for investors. The stock’s affordability for medium-sized accounts and the possibility of undefined risk positions make it a notable candidate for February. Attention should be paid to the earnings trades, which must be placed in contracts expiring post-announcement.

4. Snowflake (SNOW)

Snowflake, a cloud-based data warehousing service provider, has shown growth, trading at $207.2, up from its 2024 opening. Despite not having positive net income in recent quarters, SNOW’s stock dynamics are intriguing.

Given its high trade cost and the substantial buying power required for undefined risk positions, SNOW is more suited for defined risk trades. Strategies like a 20-delta short iron condor or 25-delta directional spreads may offer viable paths for investors to consider.

Conclusion

As we spotlight these four stocks – Enphase Energy, DraftKings, Square, and Snowflake – it’s evident that each presents unique opportunities and challenges. Investors should meticulously evaluate these options, keeping in mind the dynamic nature of the stock market and the specific contexts of each company. It’s imperative to approach these investment decisions with diligence and, ideally, professional guidance. Remember, our insights are not personal investment advice but a guide to help you stay informed and prepared in your investment journey.

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