בס״ד

880%, 2733%, 1000%! End of Year Profit Orgy! (BBY, AN, SOYB, THO/WLK, TLT/HYG, FSLY)

Posted on September 14, 2020

Scheduling changes:

  • The coming Day of Judgment, Rosh HaShana, the Jewish New Year, falls this Saturday and Sunday.  Next week’s A Jew and His Money will therefore arrive to your inbox on Tuesday, September 22nd.
  • The following week, the joyous fast of Yom Kippur falls on Monday, September 28th. Again, publication of A Jew and His Money will be delayed one day, until Tuesday September 29th.

We will not be available for communications on any of those dates.

Certainly.

But before we do, we’ve got five to shut down.

So listen up –

On August 24th we issued a directive entitled AUTOphagous Nation, wherein we recommended you sell an AN September 18th 55/60 CALL spread for a $2.50 credit and buy AN October 16th 55 PUT for $2.65.  Total debit on the affair was $0.15.

And today?

The long October PUT sells for $3.10 and the short September 55 CALL trades for $1.45.  Sell the first, buy back the second and leave the long 60 CALL be; there’s currently no bid on it (it could be we’ll sell it before this weekend’s expiry – if we get a bounce).

All told, that’s $1.50 taken on $0.15 laid out – and the chance of more to come.  And that’s 1000% in your knapsack today, Rocky.

Now go skip some rope.

NEXT!

July 8th saw A Commodity Oddity hit your inbox, a missive that recommended you purchase the SOYB February 19th 14 CALL for $1.35 and sell the SOYB February 19th 14 PUT for $0.70.  Total debit on the trade was $0.65.

And today, with lots of time left but SOYB overbought, we’re shutting her down.

We’re selling the CALL for $1.90 and buying back the PUT for $0.30.

That’s a net $0.95 on $0.65 spent.

Call it 146%.

And look for us to reinstate this edamame-lover’s bet after a pullback.

Third Trade Closing

Our THO/WLK pairing of June 18th (Cage Match to The Finish: Chemical Earth Destroyer Takes on Blond-Haired Norse God!) urged you to buy the WLK January 15th 55 CALL for $9.50 and sell the WLK January 15th 65 CALL for $4.30 (debit $5.20).  Then sell the THO January 15th 165 CALL for $5.80, for a total credit of $0.60.

Today, the short THO CALL trades for $1.35, and the WLK CALL spread is worth $5.00 ($12.20 and $7.20).  Cash out of the lot of them, and you come home with $4.25 on nothing spent.  After adjusting for minimal commissions, your haul is a dastardly 2733%.

And that, fellow Jews, is some spicy, apple and honey New Year’s bliss.

But it doesn’t stop there…

Our FSLY trade, opened on June 28th and whose details can be found here and here, puts us short the shares (at $79) and short one September 18th 170 PUT.

With the stock currently at $76.04 and the short PUT now going for $1.70, we’re taking this opportunity to close.

Buy back the shares and the PUT, and you emerge with $1.47 on no initial outlay.

Adjusted for minimal commissions offers you a very satisfying 880% take.

Lastly, on March 2nd we offered you a TLT/HYG pairing in a communiqué called Playing the First Bounce.  There we recommended you sell the TLT September 18th 174 CALL for $1.76 and buy the HYG September 18th 86 CALL for $1.76.  Zero Premium was the result.

And now?

The TLT CALL can be repurchased for a nickel, and because the trade cost nothing to initiate, we’re recommending you buy it back.

If there’s a flight to safety, TLT buyers could flood into the stock, and we’ll face a steeper loss.

Leave the HYG to ride; we may yet profit from a potential spike in junk over the coming week.

And Now…

This week’s trade.

We’ve got the best of all possible bets in Best Buy (NYSE:BBY), a company that shot higher since the Batflu bit and the (apparent) need to stock up on electronics became all consuming.

It’s our feeling the buying has now crested – along with the stock – as it looks altitudinally challenged from our very earthly perspective.

Take a peek at the daily chart –

With kind regards,

Hugh L. O’Haynew

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