January 22, 2020 - MDT Alert (DOCU)

Today, I would like to make a suggestion on a debit spread. The stock is Docusign, Inc. (DOCU).

DOCU is trading at $74.72 as I write this.

I am going to suggest a trade using the February monthly options. DOCU does not have weeklies, and the February monthlies will allow enough time to see if the stock continues to run.

My suggestion today is this:

Buy to Open February 21st - $75.00 call @ $2.45

Sell to Open February 21st - $80.00 call @ $0.70

Net debit is $1.75 per spread with a maximum gain of $3.25 per spread if DOCU trades above $80.00 by February 21st.

Based on the nominal portfolio, limit the trade to 5 spreads or 0.8% of the portfolio.

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