As I write this about an hour before the open, heading into the weekend, Friday's futures look slightly bullish, possibly allowing the markets to finish the week on a high note. 

The S&P 500 has been in positive territory every day this week, up 4.5% through Thursday’s close. The cooling off of the U.S./China trade war is an ideal tonic for the markets. Whether this remains the case is certainly debatable. 

“[Yesterday’s] data doesn’t change the narrative. Retail sales suggest consumers are becoming pickier, while there remains no sign of broad-based layoffs. The slowdown in inflation in April provides little comfort as the impact from tariffs is yet to come,” said Ellen Zentner at Morgan Stanley Wealth Management.

There were 1,239 unusually active options in yesterday’s trading. Of those, 207 were financial service stocks. Looking at the possibilities. I see three companies with bull put or bull call spreads that investors might consider for the next 30 to 60 days. 

Have an excellent weekend.

Blackstone (BX)

Blackstone (BX) had two unusually active put options, expiring in 36 days on June 20. Both are deep in the money (DITM). 

Looking at the bull put spreads for the $175 and $180 strike prices, I’ve got nine worth considering.   

“The bull put spread is a short put option strategy where you expect the underlying security to increase in value. The bull put option strategy involves selling a put option and buying a put option at a lower strike price,” Barchart’s Vertical Spreads page states. 

In this situation, you succeed when the share price exceeds the breakeven at expiration. Your maximum profit hits when the share price at expiration is above the higher strike price. 

All nine have high loss probabilities. However, they also have low risk/reward propositions. I’d go for one of the bull put spreads with a balance between the two. 

For me, that’s the short $180 put and long $145 put. If BX shares are above $153.15 at expiration, 4.36% higher than currently, you’re making money, with the maximum profit of $26.85 achieved if the share price is above $180 in 36 days.   

SoFi Technologies (SOFI)

SoFi Technologies (SOFI) had two unusually active put options, expiring in 64 and 43 days. One is deep out of the money (DOTM) and the other is at the money (ATM). 

Bull put spreads are often made with DTEs between 35 and 45 days because it balances the effect of time decay with the ability to manage the trade should the share price not move higher as anticipated. 

For this reason, I’ll consider the June 27 $13.50 put for a bull put spread. I have seven possibilities for the long put that goes along with it. 

I like the fintech stock. A little over a year ago, I recommended a couple of SOFI call options. 

“I remain bullish about SoFi’s potential to become a more prominent player in the financial services industry. In the long term, I see SOFI stock moving into double digits. But first, it’s got to get through the latest hiccup on its pathway to profitability,” I wrote on March 7, 2024.  

At the time, its shares traded around $7.70. Unfortunately, neither of the low-risk 15-day calls paid off. 

Always concerned about the capital outlay, the long $13 put has the lowest risk/reward at 1.63 to 1, with nearly a 55% profit probability.  

Regions Financial (RF)

Regions Financial (RF) had one unusually active option yesterday with the June 20 $24 call that expires in 36 days. It was slightly out of the money (OTM). 

The regional bank’s stock has done well over the past five years, up 144%, which doesn’t include its healthy 4.5% dividend yield. That appreciation is 60 percentage points higher than the SPDR S&P Regional Banking ETF (KRE) over the same period. 

The bull call spread involves buying a call option at one strike price and selling one at a higher strike price. The maximum profit would be the difference in strike prices minus the net debit. 

In this situation, you’re successful when the share price is higher than the breakeven [lower strike price + net debit] at expiration. Your maximum profit hits when the share price at expiration is above the higher strike price. 

Less than an hour into Friday’s trading, the only bull call spread with volume is the $24 strike short and $23 strike long. 

It’s not the most exciting bet with a risk/reward of 0.54 to 1 and a profit probability of 25%. You won’t get rich or be sent to the poorhouse for this one. 

Your breakeven of $23.35 [$23 strike + $0.35 net debit] is just 4.15% above its current share price. Meanwhile, your maximum profit is $0.65 [$24 strike price - $23 strike price - $0.35 net debit].