Blackstone (BX) Options Trade Alert

Plus a new recommendation in our Options Trader Portfolio...

Editor’s Note: I’m going to keep this alert on the short side, because I just covered financial stocks at some length in this week’s issue of Free Market Speculator, “The Failed Breaks,”

I’m making no changes today to our longer-term model portfolio in the Free Market Speculator. However, back on January 16th I recommended a trade in our new FMS Options Trader Portfolio in Blackstone (NYSE: BX) call options. Given the recent surge in the stock, it’s time to take action to protect profits and position the trade through the company’s earnings release next week.

I’m also adding a new trade to the FMS Options Trader Portfolio today — the details appear in the “Actions to Take” section below for paid-tier FMS subscribers.

For those interested, I’m still offering 30-day free trials to the paid tier of this service, including the Options Trader Portfolio recommendations, via this link:

—EG

Here’s what I’m recommending for the Blackstone (NYSE: BX) trade today:

1. Sell to close your 1 contract position in the March 21, 2025 $185 calls on Blackstone (NYSE: BX) at current prices.

2. Immediately after executing leg #1, buy to open a 1 contract position in the March 21, 2025 Blackstone (NYSE: BX) $190 call options.

Important Notes: I strongly recommend you attempt to execute both of these trades using a limit order set at roughly the mid-point of the bid-ask spread for the calls.

This trade is NOT appropriate for new members or those without a position in the BX calls. I’m likely to recommend holding this trade through Blackstone’s earnings release next week and buying the March 21, 2025 $190 calls at current prices without the offset of a significant profit from the BX March 21, 2025 $185 calls I recommended buying back on January 16^th, there’s just too much downside risk.

It’s time to roll our options trade in Blackstone (NYSE: BX) with the stock due to report quarterly earnings next week (January 30^th) before the opening bell. The BX March 21, 2025 $185 calls I recommended buying on January 16^th at a volume-weighted average price of approximately $5.25 ($525 per contract) are now trading near $10, showing a profit of $450 to $500.

Meanwhile, the BX 03/21/2025 $190 calls I’m recommending you buy to open today trade for around $7.60 ($760 per contract).

So, by rolling our exposure out of the BX 03/21/2025 $185 calls and into the $190 calls, we’re reducing our overall risk in this trade to about $285.

That’s -$525 to buy the BX March $185 calls back on January 16^th, proceeds of around $1,000 selling the $185 calls today and -$760 to buy the BX March $190 calls today.

That’s low enough risk I’ll be willing to recommend holding these calls through Blackstone’s earnings release next week. And, we still retain almost two months of upside exposure to BX through options expiration on March 21, 2025.

Here’s the weekly chart on the stock:

Source: Chart Courtesy of StockCharts.com

My view is that BX ultimately rallies to at least re-test the November high near $201; more likely, on a strong earnings report and continued market leadership from financials, I’m looking for the stock to make significant new highs before March options expiration.

And, since we’re reducing our risk in the BX trade today, I’m recommending a new trade for the FMS Options Trader portfolio today.

---

DISCLAIMER: This article is not investment advice and represents the opinions of its author, Elliott Gue. The Free Market Speculator is NOT a securities broker/dealer or an investment advisor. You are responsible for your own investment decisions. All information contained in our newsletters and posts should be independently verified with the companies mentioned, and readers should always conduct their own research and due diligence and consider obtaining professional advice before making any investment decision.