The Morning Trade -Friday, Nov. 13

Bet on sports betting; bet against China Mobile.
Gregory BergmanNov 13,2020,16:11

Yesterday, on word that President Trump will target Chinese stocks listed in the U.S. with ties to the Chinese military, a clear put option play emerged: Bet against stocks like China Mobile (NYSE: CHL). I bought two contracts of the put $35 put option expiring November 20 and sold this morning for a 60% profit. The news of Trump's new Chinese stock target(s) comes after companies like China Mobile were receiving a lot of positive coverage from stock pickers and analysts, who covered the company favorably to American counterpart stocks like AT&T (NYSE: T). Long-term, China Mobile might be worth buying into, but for now, stay away. Unless, of course, you bet against it short term as I did.

Trump's order, which was first reported by Reuters, could impact some of China’s biggest companies, including China Telecom Corp Ltd, China Mobile Ltd, and surveillance equipment maker Hikvision.

Bet on Sports Betting DraftKings

Shares of sports betting company DraftKings (Nasdaq: DKNG) jumped around 7% Friday after better-than-expected third-quarter results and monthly unique payers surging to surpassed 1 million. The company's guidance was raised for 2020 guidance to between $540 to $560 million, up from a range of $500 to $540 million.

DraftKings CEO Jason Robins said in a press release:
“The resumption of major sports such as the NBA, MLB and the NHL in the third quarter, as well as the start of the NFL season, generated tremendous customer engagement."

Online betting will only continue as we enter into the dark Covid-19 winter. A total of 19 states allow sports betting currently with more states on the brink of doing likewise. While the earnings were mixed overall, the surge in users combined with the upcoming holiday NFL playoff season combined with the ensuing lockdowns make DraftKings a betting stock worth betting on.

Wait to see where it trades Monday morning before picking it up.

Disclaimer
The opinions expressed in this article do not reflect the position of CapitalWatch or its journalists. CapitalWatch has no business relationship with any company whose stock is mentioned in this article. Information provided is for educational purposes only and does not constitute financial, legal, or investment advice.

Topics:draftkings, china mobile
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