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Best Options to Buy this Week

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The government and the Federal Reserve have created plenty of volatility for options traders to sink their teeth into. Whether you want to play the NASDAQ’s meteoric rise or the buzz redirected into recovery stocks, you may want to look into options trading strategies. As with any trading strategy, the most important aspect is to match the trade with your personality. If you don’t have the stomach to weather an earnings announcement, you don’t have to. 

Here are the best options to buy this week for every trading blueprint.

1. 3M (NYSE: MMM)

Symbol Company % Change Price Invest
MMM 3M
+ 2.19%
$169.15 Buy stock

The 3M Company is a leading manufacturer of retail products. It runs its business under 4 segments – safety and industrial, transportation and electronics, healthcare and consumer segments. 3M products range from industrial adhesive, tapes, electronic display materials, oral care products, skin care products and office supplies.

The retail stock has a market cap of $101 billion and an EPS of $8.53. It has a 52-week low of $114.04 and a 52-week high of $182.55. 3M has an annual dividend yield of $5.88 per share. It has high liquidity and trades more than 787,392 shares per day. 3M generated revenue of $32 billion in 2019.

2. Bets on Walmart (NYSE: WMT)

Symbol Company % Change Price Invest
WMT Walmart
– 0.87%
$143.38 Buy stock

Companies like Walmart and Costco (NASDAQ: COST) tend to rise with uncertainty and level off during times of relatively low volatility. Both sides of Congress and the White House have agreed to extend all of the important stimulus benefits to the end of the year. This gives consumers the money they need to keep buying necessities and keeps investors from pulling out of the market based on perceived uncertainty.

If you believe that the government will follow through with the agreement, prepare your trade for sideways movement or a slight fall in this stock grouping. If you don’t own any shares, an iron condor that starts well out of the money will give you room to be wrong in 1 direction. If implied volatility seems to be going down during the week and the government is following through with its promises, you can roll those wings in to maximize your profit.

3. Baidu (NYSE: BIDU) 

Symbol Company % Change Price Invest
BIDU Baidu
+ 4.84%
$250.42 Buy stock

Baidu is a global leader in providing of internet search services. It operates business through 2 segments – Baidu Core and iQIYI. It offers a range of products including Baidu App, Baidu Feed, Haokan and Quanmin.

The internet service stock has a market cap of $78 billion and has an EPS of $12.83. It has a 52-week low of $82 and a 52-week high of $248.98. Baidu has high liquidity and trades more than 9.3 million shares per day. It generated revenue of $107 billion in 2019.

4. Zoom (NYSE: ZM)

Symbol Company % Change Price Invest
ZM Zoom Video Communications
+ 2.43%
$393.87 Buy stock

Headquartered in San Jose, California, Zoom is a communications technology company. It helps businesses and organizations bring their teams together in a frictionless environment to get more done. Its product is a reliable cloud platform for video, voice, content sharing and chat. Zoom runs on mobile devices and desktops.

The tech stock has a market cap of $98 billion and has an EPS of $1.44. It has a 52-week low of $70.26 and a 52-week high of $588.84. Zoom has high liquidity and trades more than 1.3 million shares per day. It generated revenue of $330 million in 2019.

5. Progressive (NYSE: PGR)

Symbol Company % Change Price Invest
PGR Progressive
+ 1.47%
$96.21 Buy stock

Founded in 1937, The Progressive Corporation is a leading insurance provider in the U.S. It provides insurance for personal, commercial, auto and residential properties. The Progressive Corporation has over 18 million customers across the U.S.

The insurance stock has a market cap of $57 billion and an EPS of $8.63. It has a 52-week low of $62.18 and a 52-week high of $102.05. The Progressive Corporation has an annual dividend yield of $4.90 per share. It has high liquidity and trades more than 771,669 shares per day. It generated revenue of $38.9 billion in 2019.

Benzinga Options Newsletter

Whether you already know how to trade options or you are looking for ideas, the Benzinga options newsletter is a great resource for up to date strategies for today’s market. As the market changes, your strategies must change. Read the newsletter for a guide to help you navigate today’s once in a lifetime opportunities.

Best Option Strategy to Use this Week

It also seems as though cooler heads are prevailing when it comes to stopping the spread of COVID-19. Daily reported cases are down from July highs. Daily reported deaths are down 75% from April highs. Let’s hope they stay there.

Most options strategists are assuming a short term bottom in the market at our current levels. The Chicago Board Options Exchange (CBOE) put/call ratio now stands at 0.5, meaning the market is bullish on itself. If you want to speculate, smart money is moving slightly away from downside protection to capture more of the upside potential. Consider bull call spreads on stocks you like and perhaps even a synthetic long position in a recovery stock.

Best Options Brokers

Your options broker is just as important as your strategy — your broker helps to define your execution. Here are some of the reputable brokers you can depend on for industry-standard uptime, negligible latency and a powerful user interface.

Best For
Options Trading
Overall Rating
Get started securely through TD Ameritrade’s website
Best For
Options Trading
N/A
1 Minute Review

This publicly listed discount broker, which is in existence for over four decades, is service-intensive, offering intuitive and powerful investment tools. Especially, with equity investing, a flat fee is charged, with the firm claiming that it charges no trade minimum, no data fees, and no platform fees. Though it is pricier than many other discount brokers, what tilts the scales in its favor is its well-rounded service offerings and the quality and value it offers its clients.

Best For
  • Novice investors
  • Retirement savers
  • Day traders
Pros
  • World-class trading platforms
  • Detailed research reports and Education Center
  • Assets ranging from stocks and ETFs to derivatives like futures and options
Cons
  • Thinkorswim can be overwhelming to inexperienced traders
  • Derivatives trading more costly than some competitors
  • Expensive margin rates
Best For
Options Education
Overall Rating
Get started securely through Tastyworks’s website
Best For
Options Education
N/A
1 Minute Review

Tastyworks is a sophisticated options and futures broker aimed toward experienced traders. The platform was designed by the founders of thinkorswim with functionality and precision for complicated options trades and strategies. Tastyworks offers stocks and ETFs to trade too, but the main focus is options. 

Options on tastyworks are only charged a 1-way, $1 commission —  far cheaper than almost all competitors. Commissions on futures and micro futures are also affordable, and there’s no minimum required to open a cash account. It’s $2,000 if you want to use margin.

Best For
  • Options traders
  • Futures traders
  • Advanced traders
Pros
  • Powerful platform inspired by thinkorswim
  • Multiple order types and strategies
  • Cheap options commissions
Cons
  • Advanced platform could intimidate new traders
  • No demo or paper trading
Best For
Intermediate Traders and Investors
Overall Rating
Get started securely through Webull’s website
Best For
Intermediate Traders and Investors
N/A
1 Minute Review

Webull, founded in 2017, is a mobile app-based brokerage that features commission-free stock and exchange-traded fund (ETF) trading. It’s regulated by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA).

Webull offers active traders technical indicators, economic calendars, ratings from research agencies, margin trading and short-selling. Webull’s trading platform is designed for intermediate and experienced traders, although beginning traders can also benefit.

Webull is widely considered one of the best Robinhood alternatives.

Best For
  • Active traders
  • Intermediate traders
  • Advanced traders
Pros
  • Commission-free trading in over 5,000 different stocks and ETFs
  • No account maintenance fees or software platform fees
  • No charges to open and maintain an account
  • Leverage of 4:1 on margin trades made the same day and leverage of 2:1 on trades held overnight
  • Intuitive trading platform with technical and fundamental analysis tools
Cons
  • Does not support trading in mutual funds, bonds or OTC stocks

Regardless of your risk tolerance, take the time to understand the benefits and risks of trading options before getting in over your head. We are currently in 1 of the most unpredictable markets of the modern era. There is no shame in leaning on your paper trading options account to learn how you react to strategies in the real world and to build a personalized data set.

Should you choose to join the battlefield, make sure that you give yourself a set of unbreakable rules. Be honest about your trading personality and even more honest about your trading ability. Successful traders dedicate extraordinary amounts of time and resources to success in trading, so make sure you put in your time. That time is more important than any amount of money you could ever invest.

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