On 11/18 as part of our weekly Spotlight Trades to members we highlighted an opportunity to buy AbbVie (ABBV) calls due to numerous signals lining up. The play was January $120 calls at $2.80 with a $125 stock target and $113 stop. The calls closed January expiry near $16 though we took profits earlier in the move.

What went right?

All signals aligned with a consolidating daily chart sitting on weekly rising channel support. ABBV was also one of our favorite names in Pharma as it diversifies it’s portfolio away from Humira and had a key catalyst ahead with CF data that was a good reason for shares to run higher into data. Options flow signals were firing since late October (OptionsHawk Trading Hub Database view below) with size buys in January $115 calls, November $114 calls, February $120 calls and December $125 calls.

What could have been done better?

1. It spent two weeks bouncing around in that narrow range and could have added to a position that continued to have the exact same rationale for a mover higher.
2. As mentioned earlier we exited the full position into the breakout run and a better exit strategy could have been taking off partial and letting some ride or adjusting out to February $130 calls and taking some profits. There are dozens of ways to adjust options positions and often just exiting is not the ideal move.