Posted on September 27, 2023
Today’s letter is FREE in honor of the holiday.
Dell Technologies, Inc. (NYSE:DELL) makes computers and other digital accessories.
But on the New York Stock exchange they’re known for something completely unrelated.
And what, pray tell, might that be?
Well, it’s what’s known in the business as momentum, an ephemeral attribute that gets hearts racing, wallets opening, and—sadly—in the end, toilets flushing.
In any event, before we get to today’s DELL-o-rama ding-dong, we have several to close for full cash.
And by that, we mean money.
So here goes…
We start with our IYT initiative, whose details can be found HERE.
To sum, we’re in possession of a $3.10 credit and the October 20th 235 synthetic short.
The short CALL can now be repurchased for $3.40 while the long PUT is sold for $7.20.
Get it done and you exit with an unfathomable $6.90 on NOTHING expended.
Adjusted for minimal commissions gives you a hometown hero 4500%.
Take the gang out for a treat, daddy-o.
We now move to our OSK trade from a missive entitled Wanna See What a Couple of 8000% Wins Look Like? It arrived on August 9th and urged you to sell the OSK October 20th 110/115 CALL spread for $1.05 and buy the OSK October 20th 95/90 PUT spread for $1.05. Net Zero Premium was the result.
The PUT spread can be closed for a healthy $1.35 (2.35/1.00), and the CALL spread can be left to wither. It’s a looooong way out-of-the-money.
We’re going to book this as a win, even though there’s time left ‘til expiry.
And it’s a nice one.
Adjusted for minimal commissions makes it a round, chubby 800%.
We’ll keep an eye and inform you if action needs be taken.
The particulars of our DIA bet can be dug up HERE.
In brief, we’re holding the December 15th 340 synthetic short and a credit of $3.20.
And whaddaya know—the short CALL can be repurchased for $8.90 while the PUT can be offloaded for $9.05.
Do it and you shake the foundations for a mighty $3.35 on nothing spent!
Adjusted for minimal commissions makes for a handy 2133%.
Finally, we arrive at our BLMN initiative, whose details can be had HERE.
To sum, we’ve a debit of $0.53 and are holding the October 20th 25 synthetic short.
We’re buying back the CALL and selling the PUT for a credit of $1.05 (0.50/1.55).
That puts $0.52 NET in our pockets—on zilch originally laid out—and gives us bragging rights to a 247% profit (accounting for minimal commissions).
That’s a good day.
Back to the matter at hand.
We’re jumping right into DELL’s fundamentals because there’s no time for idle talk.
DELL “beat” on both earnings and revenue, but as the numbers above show, she’s still not at the level she commanded a year ago.
So why all the fanfare (as seen on the chart below)?
Well, it appears someone mentioned the term “AI” on the earnings call, and—as you know—that’s all it takes nowadays.
According to the Wall Street Journal—
The company said demand for products that help businesses use artificial intelligence is a “long-term tailwind.”
Whatever the hell you want it to mean, just buy the damn stock.
Here’s the chart—
Technicals are like this…
And we’re trading it thus—
A Jew and His Gold recommends you consider selling the DELL February 16th 65/67.50 CALL spread* for a credit of $1.30 (8.30/7.00) and buying the DELL February 16th 70/67.50 PUT spread** for $1.40 (6.00/4.60). Total debit on the trade is $0.10.
Rationale: the pick-up here is a potential $2.40 on $0.10 spent (2400%), while the downside is $2.60 (difference between the CALL strikes plus the initial debit).
Breakeven is $67.40, just 2.2% below the current price.
The full haul of 2400% is scooped on a decline of just 5.7%.
Those are good numbers.
And a February expiry offers plenty of time to get there.
And many happy returns!