Posted on July 15, 2022
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.
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.
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.
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.
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.
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.
Alan B. Harvard