Posted on September 2, 2021
We’re going full marine today with a bet on AQUA stock, but before we get there, we’ve got two closing for a pirate’s treasure.
We start with our EVRI trade that graced your inbox on July 8th.
The directive was called Upping the Ante With a Cure for Gambling. It urged you to sell the EVRI September 17th 25/30 CALL spread for a credit of $1.25 and buy the EVRI September 17th 25/22.50 PUT spread for $1.40. Total debit on the trade was $0.15.
Today, we’re of the opinion that the CALL spread can be safely left alone, while the PUT spread can be closed for a profit.
The long 25 sells for $2.55 and the short 22.50 for $1.40. Sell the former and buy back the latter and you step out with $1.00 NET on $0.15 laid out.
That’s a profit of 667%, and should buy you several weeks’ worth of T-Bones for the whole family down at the Lincoln Grill.
All depends upon the CALL spread finishing out-of-the-money, of course, and we’ll be watching closely as the days tick down to expiry.
Right back at ya if any action needs be taken.
We’re closing down our Smucker’s (SJM) initiative, all the details of which can be found HERE.
In short, we’re holding the October 15th 125 synthetic short and a credit of $1.56.
The 125 CALL sells for $2.30 while the 125 PUT goes for $4.40.
Buy back the first and sell off the second, and you exit the trade with a jam-dandy $3.66 NET on an initial debit of $3.50.
And that’s a sweet-as-can-be 104%.
Today’s play is a straightforward torpedo shot at an already sinking ship.
We’re betting on a decline in Evoqua Water Technologies Corp. (NYSE:AQUA), a company that develops and deploys water and wastewater treatment systems, has a global reach and is based in Pittsburgh, where they know a thing or two about dirty water.
The stock’s vital statistics are pure sludge –
The company last week agreed to a settlement after serious flaws in its governance regime led to a shareholder lawsuit.
Now to the charts –
Technically, we’ve got –
Now the weekly –
As to the weekly –
All of which is pressing us to dive in like this –
A Jew and His Gold recommends you consider selling the AQUA November 19th 35/40 CALL spread* for a credit of $2.15 (4.30/2.15) and buying the AQUA November 19th 40/35 PUT spread** for $2.50 (3.40/0.90). Total debit on the trade is $0.35.
Rationale: the trade is cheap, and we like that.
For $0.35 we buy the opportunity to gross a maximum $5.00 (a better than 1300% take).
Our downside is limited to $5.35 (difference between the CALL strikes plus initial debit).
Breakeven occurs at $37.15.
We’ll close as soon as we feel the shares have declined and 1) are about to bounce or 2) are stalled in place.
She’s a moving target, friends.
May the G-d of Jacob protect you, fellow Jews and Noahides.
And bring you many happy returns!