August Options Now Expiring, and We’ve Got 3 to Tend (CPRT, XPO, CXM)

Greetings from the Royal Palace in Monaco, where we’re presently dining on cumin sprigs and fresh corn, fried in salmon oil.

Let’s Get Started…

We open with our CPRT trade, that arrived in your inbox on May 29^th in a missive called CPRT Ready to Skid Lower.

There, we urged you to sell the CPRT August 18^th 90/95 CALL spread for $1.75 and buy the CPRT August 18^th 85/75 PUT spread for $1.85.  Total debit was $0.10.

Today, CPRT opens trading at $85.99.  And with more downward momentum expected at the open, we say leave her be.  We either lose our initial dime, or we make something much bigger.

Stay tuned!

N – E – X – T !!!

XPO is up next; the trade that was featured May 24^th in XPO Runs Out of Gas.

The bet was to sell the XPO August 18^th 47.50/52.50 CALL spread for $1.65 and buy the XPO August 18^th 45/40 PUT spread for $1.65.  Zero Premium was the result.

And now…?

We’re going to be on the hook for the full value of the CALL spread at the close, so we’ve got to act.

Like this—

We’re setting the XPO November 17^th 67.50 synthetic short* for a credit of $2.70 (7.70/5.00).

That’ll reduce our debit to $2.30 and give us 90 days to capitalize on XPO weakness.

[*Sell the CALL and buy the PUT.]

Finally, we arrive at our CXM trade, whose details can be found HERE.

In brief, we’ve got a credit of $0.21 and we’re holding the 7.50 synthetic short that expires tonight.

And…?

All things being equal, it appears we’ll be in the red at the close unless we move.

So we are.

Buy back the short CALL for $6.45 and reset the February 16^th 7.50 synthetic short* for a credit of $6.25 (6.50/0.25).

That gives us a credit of a penny and half a year to profit from CXM weakness.

[*Sell the CALL and buy the PUT.]

Shabbat Shalom,

All You Good Jews and Noahides!

Eschatologically yours,

Alan B. Harvard

Follow @HughLOHaynew