Maximize Your DraftKings Investment: Explore Risk-Controlled Options Strategies for DKNG Stock

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  • DraftKings (DKNG) experienced a significant uptick, closing up 4.6% on Wednesday, indicating a strong market movement.
  • The stock’s addition to the IBD SwingTrader portfolio marks a notable endorsement from influential market analysts.
  • “Investors looking for growth opportunities in DraftKings can consider strategic options trades to manage risk effectively,” suggests financial expert Gavin McMaster.

Explore the potential of DraftKings stock and how options can play a role in maximizing investment returns.

DraftKings Stock Trade Could Return 28%

The recent breakout of DraftKings stock past an alternative entry point has opened up new trading opportunities. A bullish diagonal spread, involving the purchase of a May 16, 2025, 40-strike call for $1,310 and the sale of a June 21, 2024, 50-strike call for $90 in premium, results in a net cost of $1,220. This strategy caps the potential loss while offering a substantial upside if the stock reaches or exceeds $50 by June 21, potentially yielding a 28% return.

Exit Strategy For Option Trade

Setting a stop loss at a close below $43 provides a safety net for this options strategy. The trade’s net delta of 46 suggests it mimics holding 46 shares of DraftKings, providing substantial exposure without equivalent capital investment. This strategic positioning leverages market movements with controlled risk, ideal for conservative investors seeking to capitalize on DraftKings’ market performance.

Financial Ratings and Market Position

DraftKings maintains a robust market stance with a Composite Rating of 80 and an EPS Rating of 80 from IBD, underscoring its financial health and growth potential. A Relative Strength Rating of 92 further highlights its performance superiority in comparison to industry peers, making it a compelling choice for investors.

Conclusion

The strategic use of options in trading DraftKings stock offers investors a balanced approach to capitalizing on stock movements with minimized risk. The outlined bullish diagonal spread not only demonstrates a potential high return but also emphasizes the importance of exit strategies and market ratings in making informed trading decisions. As always, investors are advised to conduct thorough due diligence and consult with financial professionals before engaging in options trading.

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