Posted on March 12, 2023
We start with our CAT trade from January 2nd. The letter was called Nine Lives Up! CAT Taken to the Tanner!, and there we urged you to sell the CAT March 17th 250/260 CALL spread for a credit of $3.20 and buy the CAT March 17th 230/220 PUT spread for $3.30. Total debit was a dime.
The long PUT spread can be sold for $3.70 (6.05/2.35) and the short CALL spread left to wither (it melts this Friday).
That will give us $3.60 NET on a dime spent.
And that’s a luxurious, Jacuzzi-like 3600%.
Our MMS initiative was delivered on February 16th in a dispatch entitled Intelligentius Maximus. There, we recommended you sell the MMS April 21st 85/90 CALL spread for $1.70 and buy the MMS July 21st 80/75 PUT spread for $1.65. Credit on the trade was $0.05.
The PUT spread can be sold this morning for a very nice $2.25 (4.10/1.85), and the short CALL spread should be left to expire.
There’s still a month left on it, but it’s quite far OTM, so we’re not so concerned.
Should things remain stable until then, we’ll walk with $2.20 NET on a nickel spent.
And that’s 4400%.
We’ll be watching closely and will inform you of any action that needs be taken.
On December 28th we updated our ARLP trade, and her details can be found HERE.
In brief, we’ve got a debit of $0.38 and we’re holding the June 16th synthetic short at the 20 strike.
We’re closing it down.
Buy back the CALL for $1.10 and sell the PUT for $2.00 and you exit with $0.52 on no initial expenditure.
Adjusted for minimal commissions gives you a profit of 247%.
And that’s a fairly weighty sack of Brazil Nuts.
Turning now to our December 22nd CMC bet from Scrap Metal Dealer to Junkyard Dog, the idea was to sell the CMC March 17th 50/55 CALL spread for $1.75 and buy the CMC March 17th 47/42 PUT spread for $1.65. Total debit was $0.10.
The PUT spread can be offloaded for $0.40 (0.60/0.20) and the CALL spread left swinging (it expires this Friday).
Should all go well, we’ll step out with $0.30 NET on a ten cent outlay.
Call it 300%.
And call it …
Last up is our GILD trade from the 8th of December. The communiqué was called Drug the People and Steal Their Minds, and it called for the sale of the GILD May 19th 95/100 CALL spread for $1.01 and purchase of the GILD May 19th 82.50/80 PUT spread for $1.09. Total debit on the affair was $0.08.
The PUT spread can be sold for $0.75 (4.85/4.10) and we say take it.
The CALL spread is far OTM, so you can leave it be. If anything happens that requires your attention, we’ll be in touch.
Until then, we’re calling it a win of $0.67 NET on eight cents spent.
The calculator calls that 837%.
Hearty congrats to Investor Kamaruddin, who took on multiples of the trade.
And now we turn to this week’s venture, with nVent Electric PLC (NYSE:NVT) as underlying.
NVT is a UK based manufacturer of electronics and communication equipment that they market across all of planet earth.
The company’s fundamentals don’t look so dastardly, but everything else sure does.
Consider the numbers—
NVT announced earnings last week, and beat on both the top and bottom lines.
But as the chart below illustrates, it didn’t help a whit.
With kind regards,
Hugh L. O’Haynew