Posted on September 15, 2022
We’re closing our NUS trade before moving on to bigger and better game today.
Not that NuSkin wasn’t a hide worth tanning – verily, it was…
Check it out –
Full details of the tackle can be found HERE.
In brief, we’re holding a credit of $1.11 and the December 16th synthetic short with a 40 strike.
With NUS at $37.17, the CALL can be repurchased for $2.20 and the PUT sold for $4.60.
Execute and you NET $3.51 on just $0.40 spent.
And that makes for an 877% return.
And now on to a fresh trade.
We’ve got a high-tension wire act from California’s voltaic know-it-alls at Pacific Gas and Electric Corp. (NYSE:PCG), whose stock has been a highly-charged conductor of profits for the last ten weeks.
But maybe not for much longer.
Well, in spite of the fact that there’s extreme heat in California right now and PCG is operating at capacity;
And in spite of the fact that energy prices, in general, are inflated (and growing more so) across the globe;
And in spite of the fact that everyone expects California to be the first jurisdiction on the planet to go wholly auto-electric…
None of that, in our view, justifies the price action we’ve witnessed of late in PCG stock.
Before we get to the chart, though, have a look at some numbers.
In short, the company’s fundamentals are whacked.
This is an electric utility, ladies and gentlemen, not a brain-chipping, totalitarian nanotech start-up.
Now look at the chart –
Technicals are like this –
And it’s with all the foregoing in mind that we offer you this –
A Jew and His Gold recommends you consider selling the PCG December 16th 13/14 CALL spread* for a credit of $0.46 (1.16/0.70) and buying the PCG December 16th 14/13 PUT spread** for $0.55 (1.37/0.82). Total debit is $0.09.
Rationale: for nine cents we earn the possibility of netting a max $0.91.
Max loss is $1.09 (difference between the CALL strikes plus the initial debit).
Breakeven on the trade is $13.41, and with price already at $13.22 – we’re now in-the-money by $0.19.
And that’s always nice…
With such a risk/reward profile, it makes sense to consider taking on multiples of the trade.
As your purse permits, of course.
Evil-doers will pay – because the Al-mighty hates them.
May we ever find favor in His eyes, and praise His great name far and wide,
that all may know there is but One G-d in heaven and on earth.
Yishtabach shemo l’ad!
Many happy returns!