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Profit Booster
Make Money 3 Ways from Great Growth Stocks

Cabot Profit Booster Issue: February 4, 2025

The AI theme came under heavy pressure last Monday, which weighed on the markets. However, by week’s end the bulls had bought the dip and impressively the S&P 500 had fallen only marginally, the Dow had eked out a small gain, while the Nasdaq “only” lost 1.5%.

The AI theme came under heavy pressure last Monday, which weighed on the markets. However, by week’s end the bulls had bought the dip and impressively the S&P 500 had fallen only marginally, the Dow had eked out a small gain, while the Nasdaq “only” lost 1.5%.

The Stock – Shopify (SHOP)

Retail sales for the 2024 holiday season “jumped strongly” compared to the previous year’s period, according to the National Retail Federation (NRF), driven largely by online sales that increased 7% for the month and with merchants reporting record-breaking sales for Black Friday and Cyber Monday.

Among the biggest winners were the merchants using the payments, shipping and point-of-sales (POS) services of Shopify whose tools allow users with limited technical knowledge to quickly and easily create an online presence and sell directly to their customers without relying on a middleman—in early January, the firm said that the Black Friday to Cyber Monday period saw its merchants grow sales by a solid 24% from a year ago. And this comes after a healthy string of results in recent quarters, highlighted by a much-better-than-expected top and bottom line in Q3, driven by a 25% gain in gross merchandise volume.

Of course, now the focus has shifted to the impact tariffs (which went into effect in China today, but were delayed by a month in Canada and Mexico) may have going forward—though, it should be noted that Shopify’s solution in part plays into what could be a big shift in the international trading dynamic, with tools that enable merchants to collect duties and import taxes directly at checkout, ensuring customers are aware of total costs, while also offering a tax compliance service that automates the identification and mapping of tariff codes to products and calculates duties and import taxes, all of which simplifies the compliance process for international sellers (a key part of the firm’s growth).

Still, the tariff issue will be one to watch, though more important will be earnings, which are due February 11—analysts expect 27% growth on both the top and bottom lines, driven largely by its overseas growth.

Technical Analysis

SHOP etched a huge launching pad from February of last year into November before the Q3 report caused a massive gap up—in a liquid name, such action usually doesn’t just up and die. We got stopped out of our stake in the stock during the early-January shakeout, but we never stopped watching it, and now it appears to have set up again, with a reasonable eight-week rest and some buying coming in last week. Stop - 104

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The Covered Call Trade

Buy Shopify (SHOP) Stock at 118, Sell to Open March 120 Strike Calls (exp. 3/21) for $9, or a Net Price of 109 or less

Static Return: $900 per covered call (8.25%)

Breakeven: 109

Covered Call Return (if assigned): $900 per covered call (8.25%)

Please note, the stock and options prices will be moving throughout the day, so these prices are simply an approximation of prices that you should be able to achieve.

However, the important component of this equation is that the stock price paid, minus the premium received via the call sale, equals the approximate Net Price, or 109 or less. (In this case, 118 minus 9 = 109. Or another example is you could pay 118.50 for the stock and sell the call for 9.50 , which also equals 109.)

For every 100 shares of stock you buy, you can sell 1 call. For every 200 shares of stock you buy, you can sell 2 calls. And so on …

Open Positions

Stock Name and SymbolPrice BoughtCurrent Stock PriceStopOption - Price of Call SoldCurrent Option Price
Rubrik (RBRK)657156February 70 -- $3$4.50
Robinhood (HOOD)42.755233.5February 42 -- $4.75$10.00
Cloudflare (NET)121.15138107February 120 -- $8.50$18.00
Guardant Health (GH)47.44836.5February 50 -- $2.40$3.30


The next Cabot Profit Booster issue will be published on February 11, 2025.


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Jacob Mintz is a professional options trader and editor of Cabot Options Trader. Using his proprietary options scans, Jacob creates and manages positions in equities based on unusual option activity and risk/reward.