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July OPEX is Mamash a Birthday Party – Profits of 202%! (CVX, DOW, NUS, PPC, HRB, TWNK, BG)

Posted on July 15, 2022

Six expiring this eve, and one more dripping with cash.

We’re going to lead off with our dollar-soaked CVX trade, from a dispatch called Topple the Rig!

It arrived to your greedy little hands on a celebratory July 4th and urged you to sell the CVX August 19th 145/150 CALL spread for $2.20 and buy the CVX August 19th 145/140 PUT spread for $2.55.  Total debit was $0.35.

And now…?

The CALL spread can be repurchased for $1.44 (3.25/1.81) and the PUT spread can be liquidated for $2.50 (12.40/9.90).

Get that done, and you take home $0.71 NET on $0.35 spent.

And that’s a healthy 202%.

Our DOW trade was opened July 27th in a letter called Chemicals: The Lifeblood of the Bull.  There, we recommended you purchase the DOW July 15th 54/57 CALL spread for $0.96 and sell the DOW July 15th 53/50 PUT spread for $0.87.  Total debit was $0.09.

Prognosis: Last eve, DOW closed with the PUT spread in-the-money, so we’re on the hook for $3.00.

That said, we still believe a bounce is inevitable, so we’re playing it as follows –

We’re setting the DOW September 16th 52.50 synthetic CALL* for a credit of $4.15 (5.50/1.35).  That will flip the debit to a credit of $1.06 and give us two more months’ play.

[*Buy the 52.50 CALL and sell the 52.50 PUT.]

NEXT!

Our NUS adventure was penned on June 23rd and proposed you sell the NUS July 15 40/45 CALL spread for $2.40 and buy two (2) NUS July 15th 40 PUTs for $1.40 each.  Debit was $0.40.  The missive was called Beauty Industry About to Get Ugly.

With shares of NUS now at $41.14 and futures flat to lower before the open, we’re recommending you leave things be, and –

Sell the August 19th 40/45 CALL spread for a credit of $1.70 (2.95/1.25).

We’ll know how it all plays out after the close.

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Our PPC initiative was launched on June 13th in a communiqué called The Pride and the Shame, and it urged you to sell the PPC July 15th 29/32 CALL spread for $1.20 and buy the PPC July 15th 31/28 PUT spread for $1.30.  Total debit was $0.10.

PPC closed last eve at $30.32, meaning we’re looking at a more-or-less breakeven on the trade.

That said, the stock’s future still looks sour.

So, we’re reinstating the trade with the following parameters:

Sell the PPC August 19th 29/31 CALL spread for $1.00 (2.30/1.30) and buy the PPC August 19th 31/29 PUT spread for $1.10 (1.95/0.85).

We thereby add $0.10 to our debit and gain the chance to participate in the stock’s coming downside.

Full details after the close with respect to final credits/debits.

Tax: The Only Thing That Grows Without Rain graced your inbox on June 6th and encouraged you to sell the HRB July 15th 35/37 CALL spread for $0.85 and buy the HRB July 15th 36/34 PUT spread for $0.95.  Total debit was $0.10.

As of the close last eve, it appears the CALL spread will end slightly in-the-money.

That said, futures are slightly lower, as mentioned, so we’re recommending you leave things be.

More news after the close.

Moving Right Along…

Our TWNK trade was delivered in a memo called When Hostess Fails, The Jews Will Triumph.  It was May 23rd and it recommended you set the TWNK July 15th synthetic short using the 22.50 strike for debit $1.80.

With TWNK closing last eve at $20.81, we’re urging you to leave it be.

We’ll be very close to breakeven.

More after the close.

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Last up is our BG trade, whose details can be found HERE.

Bottom line is we’re holding a credit of $11.41 and two short 55 CALLs expiring this eve.

Action: buy back the CALLs at the close (or during intraday weakness) and sell two (2) more BG January 20th 60 CALLs for $26.90 each.

That will lower the existing credit to roughly $5.20 and give us an additional half year of play.

And that’s it, race fans.

G-d is good, He’s on the side of good, and the tests He sends us are good.

They give us a chance to prove we’re trustworthy.

Eschatologically yours,

Alan B. Harvard

 

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