PayPal Stock Analysis: How To Trade PYPL From Here (Triple Income Wheel)

Is PayPal Holdings (PYPL) a good value after the recent sell-off?

As one of the world's largest digital payment processors, we still think that the company has a very bright future. In fact, management expects PayPal revenues to double by 2025 (from $25 billion to $50 billion). Also, the company recently signed a new partnership with Amazon (AMZN), which will enable Amazon to start accepting Venmo payments in 2022. 

All that said, it's unlikely that the stock will move in a straight line higher from here and it would not be surprising if PayPal continues to consolidate in the short term.

So how can we structure a trade to take advantage of the upside potential in the stock while also protecting some of the near-term downside?

It's a perfect situation for a "Triple Play" trade!

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PayPal Holdings, Inc. operates as a technology platform and digital payments company that enables digital and mobile payments on behalf of consumers and merchants worldwide. Its payment solutions include PayPal, PayPal Credit, Braintree, Venmo, Xoom, Hyperwallet, and iZettle products. The company's payments platform allows consumers to send and receive payments, withdraw funds to their bank accounts, and hold balances in their PayPal accounts in various currencies. It also offers gateway services that enable merchants to accept payments online with credit or debit cards, as well as digital wallets. PayPal Holdings, Inc. was founded in 1998 and is headquartered in San Jose, California. (Source: Seeking Alpha)
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A "Triple Play" trade involves simultaneously selling a cash-secured put and a covered call on a stock that you own.

Note that if you don't currently own PYPL stock, you will want to buy it before you write the covered call.

PYPL Price at publication = $212.60

Cash-Secured Put Trade:
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PYPL Dec 17th $195.00 Put
Option Premium: ~$2.27 premium
Average Monthly Yield %: 1.1% (13.2% annualized)
Margin-of-Safety %: 8.3%
Delta: 18

Covered Call Trade:
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PYPL Dec 17th $240.00 Call
Option Premium: ~$1.95 premium
Average Monthly Yield %: 0.9% (10.8% annualized)
Upside Profit %: 13.8%
Delta: 16
DISCLAIMER--------------------------------------------------------------------------------------------------------------------------------------
Parsimony Investment Research and/or it's affiliates may or may not have a position in the stocks and/or options mentioned in this video at the time of publication. The information contained within this video is for informational and educational purposes only and it is not intended as a recommendation of the securities highlighted or any particular investment strategy; nor should it be considered a solicitation to buy or sell any security. The strategies and securities mentioned in this video may not be suitable for all types of investors and the information contained in this report does not constitute advice. Past performance is not a guarantee of future results. Options involve risk and are not suitable for all investors. Prior to buying or selling an option, a person must receive a copy of Characteristics and Risks of Standardized Options. Copies of this document may be obtained from your broker.

Видео PayPal Stock Analysis: How To Trade PYPL From Here (Triple Income Wheel) канала Triple Income Wheel