Posted on April 25, 2022
Since we last touched base, the market has crumbled, along with a whole lot of matza.
And that’s been good news for our subscribers, as we’re now ready to cash out of seven huge winners.
Directly after that, we serve up a microwave wonder featuring Kraft Heinz (NYSE:KHC) in all its tasty, factory-derived flavor.
We start with our UGI/XLU initiative that arrived on April 6th in a letter called We Open Afresh on the Utility Front. The trade urged you to go long UGI stock (then at $36.08) and offset it with a short on XLU (then at $75.39). We also suggested you purchase a protective XLU May 20th 78 CALL for $0.77 and sell a protective UGI May 20th 35 PUT for $0.85. Total credit was $39.39.
UGI trades for $36.63 and XLU for $74.25. Sell the former and buy back the latter and you NET $1.77 (39.39 – 37.62) from the stock.
Then close out the options – sell the XLU CALL for $0.15 and buy back the UGI PUT for $0.55 – and your bottom line profit is $1.37 on nothing expended.
Adjusted for minimal commissions gives you an 813% return in under three weeks!
Next up is our MOS initiative, whose trade details can be found HERE.
In short, we’re holding a debit of $0.17 and the May 20th synthetic short with a 70 strike.
And with the shares now at $66.77, we say it’s time to close.
Sell the PUT for $6.75 and buy back the CALL for $4.05, and you walk pretty to the tune of $2.72 on nothing spent (trade was set for a two cent credit).
Adjusted for minimal commissions gives you a giant-size 1713% profit.
And that’s more than just dung in your garden.
Speaking of which, our bet on RGLD, whose particulars are located HERE, has us in possession of a $0.58 debit and the June 17th 140 synthetic short.
RGLD last traded at $137.29, and we say that’s the last of our trade, too.
The long PUT is worth $8.20 and the short CALL goes for $6.30. Sell the former, buy back the latter and you dipsey-doodle home with $1.27 NET on an initial expenditure of a nickel.
That’s one for the books, folks – a cool 2540%.
Can’t get enough of that p**p.
Details on our CF trade can be accessed HERE.
In sum, we have a credit of $3.40 and we’re holding the May 20th synthetic short at 100.
And don’tcha know… CF stock now sells for $96.94.
That puts this one in play.
Buy back the CALL for $5.50 and sell off the PUT for $8.60 and your take is a very fat $6.60 NET on an initial outlay of ZILCH.
Adjusted for commissions gives us a 4300% profit.
For just sitting around.
Moving right along, we arrive at our AA trade whose lowdown is found HERE.
To keep it short, we’re looking at a credit of $2.05 and are holding the May 20th 80 synthetic short.
The CALL goes for $1.47 – buy it back.
The PUT sells for $13.95 – sell it off.
Get it done and you’re $10.28 the richer (trade was launched with a debit of $0.15).
That’s a 6853% profit.
And that’s a meeting with the big boys.
The skinny on our HAL trade can be sourced HERE.
In short, we’ve got a credit of $0.07 and are in possession of the June 17th 38 synthetic short.
And we say that’s enough.
The 38 CALL can be bought back for $2.89 and the 38 PUT sold for $3.10.
Execute, and $0.28 NET is yours on nothing laid out (initial credit of $0.07).
Adjusted for commissions gives you 86%.
That’s right… not every win is an avalanche.
And last but not least, we arrive at our GWW wager, for which we’re holding a credit of $0.40 and a short May 20th 550/560 CALL spread.
Action: sell the long 560 CALL and leave the short 550 be.
That brings you an additional $0.85, for a current total credit of $1.25.
With the stock now trading at $499.34, she’s got better than 10% to climb in the next 25 days to put the short CALL in danger.
Set a STOP buy at 550 to be sure you take no losses.
And keep an eye.
We will, too.
And now for macaroni and ketchup…
Pre-Batflu readers will remember that we played Kraft Heinz for a 1290% profit back in the fall of 2019.
And again, today, the sound of ketchup-squirt is in the air, as the stock, we believe, prepares once more to stain the tablecloth.
Consider the following –
Have earnings problems. To wit –
Now look at the chart –
Technically, it appears a pullback is in the cards –
But we don’t need so dramatic a pullback to score big here.
The trade we’ve crafted requires only a marginal decline to deliver a full 900%.
Like this –
A Jew and His Money recommends you consider selling the KHC May 20th 43/46 CALL spread* for a credit of $1.00 (1.56/0.56) and buying the KHC May 20th 44.50/43.00 PUT spread** for the same $1.00 (2.39/1.39). Net Zero premium is the result.
Rationale: no initial outlay and a potential 900% profit is as good as it gets, as far as we’re concerned. We’re figuring on minimal commissions of $0.15 to determine the return.
Max loss is $3.00 (difference between the CALL strikes).
Price must decline a mere $0.18 or 0.4% for us to cash in fully. And that’s tremendous. Kinda makes you want to put on multiples, no?
The set-up here is strong, but the time factor weighs heavily. Just 25 days until expiry.
Take it into consideration.
And may the Holy One continue to guide us and our loved ones b’rachamim.
With kind regards,
Hugh L. O’Haynew