Posted on January 21, 2022
Our CHD trade arrived on December 9th in a letter called You Can’t Clean That With Soap, and urged you to sell the CHD January 21st 95/100 CALL spread for $1.70 and buy the CHD January 21st 95/90 PUT spread for $2.10. Total debit on the affair was $0.40.
Today, with the momentum on the stock clearly downward, and our breakeven in sight, we’re recommending you leave this one be, AND sell the CHD February 18th 100/105 CALL spread for a credit of $1.95 (4.00/2.05).
That will offer us some further insurance against a small loss, and flip our debit to a credit of $1.55.
Actual details won’t be known until after the close.
We’ll revisit on Monday.
We closed most of our APD trade on December 21st, but the CALL spread was left open.
And a good thing, too.
Failing an asteroid striking the Statue of Liberty, the CALL spread will expire worthless this eve, and we’ll keep our 983% gain.
On to our Ford trade, opened November 8th in Hey! Look at That Ford Swerve! There, we recommended a short sale of F at $19.29, and the purchase of protective F January 21st 24 CALL for $0.49. Total credit on the trade was $18.80.
With Ford in a freefall (now at $21.65), and the CALL about to expire worthless, we face a $2.85 shortfall on the trade.
And yet the chart speaks to ample downside to come.
We’re recommending you sit tight, set a STOP buy order on the shares for 30 days hence at $25 to protect against any runaway loss, and continue to watch the action.
As will we.
Details on our PZZA trade can be found HERE.
In brief, we’re holding a debit of $3.65 and the 120 synthetic short expiring tonight.
With the shares now at $114.71 and poised to fall further, we recommend you leave her be.
We’re nicely in-the-money.
We’ll know our exact take after the close.
Our UPS trade details can be accessed HERE and reveal the following –
We’re short one lot of UPS with a breakeven of $178.20 and are holding a long UPS January 21st 210 CALL.
The long CALL will almost certainly expire worthless this eve, and the question is whether we want to buy more protection.
For the meantime, we say no.
Set a STOP buy for 30 days at 215 and watch the action.
Momentum is decidedly lower, and we’ve a strong hunch we’ll hit our breakeven by mid-week next.
Our XLF trade needs help.
We’re short the shares with a breakeven at $31.85 and are holding a protective January 21st 41 CALL.
The long CALL will expire worthless this eve, and with the market under extreme pressure we’re foregoing buying another one.
Place a STOP buy order for XLF at 42 for 30 days, and keep an eye.
Our BLDR initiative’s particulars are available HERE.
To sum, we’re holding the January 21st synthetic short at 32 and a credit of $1.19.
The short 32 CALL will end up in-the-money this eve, so we recommend you buy it back at the close for roughly $36 (full details after the close) and sell two (2) BLDR August 19th 55 CALLs for $18.20 each.
Final tally available next week.
Our IBP trade numbers are found HERE.
The skinny on this one is as follows –
We’ve got a credit in hand of $4.01 and are short two 90 CALLs expiring tonight.
Buy them back at the close and sell two IBP June 17th 90 CALLs for roughly $22 each.
That should add roughly $7.00 to our credit, bringing it to $11.00.
Full details, as usual, after the close.
Our bet on BG, along with all her pertinent details can be accessed HERE.
In brief, we’ve got a credit of $8.41 and are short two (2) January 21st 57.50 CALLs.
With momentum here strongly lower, we’re recommending you repurchase the CALLs at the close and sell two (2) BG July 15th 55 CALLs for roughly $39 each.
That will raise our credit to the $10 range, with full details to be known after the close.
CROX shares have declined nearly 40% from their mid-November highs and are looking ready to give back more.
Our CROX position is as follows –
We’ve got a credit of $19.36 and are short two (2) 70 CALLs expiring tonight.
And we’re acting thus – buy back the CALLs at the close and sell two CROX June 17th 75 CALLs for roughly $34 each.
We’ll know exact numbers after trading ceases, but that should reduce our credit to the $15.00 range.
Our DE trade’s details can be found HERE, and tell the following story –
We’ve got a healthy credit of $22.08 and are holding two short DE 320 CALLs expiring today.
Action: buy back the 320’s at the close and sell two DE June 17th 330 CALLs for roughly $50 each.
That should expand our credit to roughly $23.00, with a more precise accounting after the close.
SHOP shares have collapsed by better than 40% since their highs in mid-November. And they aren’t ready to stop now.
Our SHOP trade details can be found HERE.
In short, we’re holding a $2.20 credit and are short three (3) January 21st 860 CALLs.
Buy them back at the close and sell three SHOP July 15th 960 CALLs for roughly $172 each.
That will add some $6.00 to our credit, bringing it to $8.20 (full details after the close).
Finally, we arrive at our UNG trade, whose details can be found HERE.
Basically, we’re holding a credit of $1.24 and are short one January 21st 23 PUT.
Action: buy back the PUT for $10.30 and sell the UNG January 20th (2023) 22 PUT for $10.10.
That will reduce our credit to $1.04 and extend the term of the trade.
All Praise the Holy One, Blessed Be He.
Alan B. Harvard