Posted on July 19, 2021
Three to close before we get to today’s action.
Buckle up Henry!
We start with our UFPI initiative, launched on April 26th in a letter called We’re Loading Up Our Woodies On The Short Sale Side.
The order of the day was to sell the UFPI October 15th 90 CALL for $3.70 and buy the UFPI October 15th 65 PUT for $4.00. Total debit was $0.30.
The short CALL trades for $1.25 and the long PUT for $2.65.
Buy back the former and sell off the latter and you take home $1.40 on $0.30 spent.
That’s a NET take of 367% in under three months. Annualized (for all you math greats out there) makes for a very impressive 1467% return.
We’re also closing our CAT trade. The details of which can be found HERE.
In short, we’re currently in possession of a $5.95 credit and the September 17th 210 synthetic short.
The current price on the short 210 CALL is $8.00, while the 210 PUT is fetching $10.65.
Buy back the first and sell off the second, and you pocket an additional $2.65, bringing your NET haul on the affair to a fulsome $8.60 on $8.00 spent.
And that’s a one hundred and seven percent can of ravioli.
Finally, our GRWG pot trade, whose particulars you’ll find HERE.
The skinny on this one is we’re holding a debit of $0.35 and the October 15th synthetic short at 40.
So, with GRWG now trading at $38.08, the short CALL goes for $4.65 while the long PUT delivers $6.30.
Buy back the CALL and sell the PUT, and you pull in $1.30 NET on an original outlay of $9.50.
That makes for a 13.6% return.
For those who feel there’s more downside here, we’d concur.
Support doesn’t arrive until the $33 range (which could add another five points to the winnings).
We’d just hate to see a bounce here that stalls our trip to the bank indeterminately.
All right, we’ve arrived at today’s trade.
And it’s centered on a Dublin-based auto-parts manufacturer called Aptiv PLC (NYSE:APTV), for whom both Matty and I worked night shift before our conversions.
But that’s for another time.
APTV, like everything Irish, is filled with exaggeration.
Consider the fundamentals –
Now, Sister Mary Margaret, have a look at the chart –
Technicals look like this –
Now look at the weekly –
Weekly technicals also point to weakness –
And it’s for all the foregoing that we’re playing this sod-codger two ways.
Like this –
A Jew and His Money recommends you consider buying the APTV August 20th 160/165 CALL spread* for $1.15 (2.50/1.35) and the APTV September 17th 145/135 PUT spread** for $3.30 (5.80/2.50). Total debit on the trade is $4.45.
Rationale: Earnings will be released August 5th, and a lot could happen until then.
Should support at 146 be broken, it’s very likely we’ll see a negative earnings report at that time.
Should the stock play between 150 and 160 over the next week or two, however, an upside surprise is likely in the cards.
We’ll be watching near term action closely.
That said, we’re preparing for both eventualities. We’re spending $1.15 on the CALL spread for the chance to gross $5.00 in the event of an upside breakout, and another $3.30 on the PUT spread to gross $10.00 should gravity strike.
Maximum gain is $10.55, as we’re dealing with two different expiries (i.e., we could win on both – though it’s unlikely).
Maximum loss is limited to our initial debit ($4.45).
With kind regards,
Hugh L. O’Haynew