March Expiries and a Big 700% Win! (AKRO, RRC, CROX, CMC, TR, PCG, VMI)

We’ve got five trades closing today that require your attention, so listen up good, Clanranald, and take good notes.

But first…!

We’re closing our AKRO initiative from January 5^th.  The directive was called Earthquake Destroys San Fran’s Akero Therapeutics, and it urged you to sell the AKRO May 19^th 70 CALL for $3.80 and buy the AKRO May 19^th 30 PUT for $3.80.  Net zero premium was the result.

Today, the PUT sells for $1.20 and the CALL… is simply too far OTM to worry about.

The stock is now at $39.74.

Dump the PUT and let the CALL wither.

If there’s a need for further action we’ll tell you.

In the meantime, book it as a NET $1.20 win.

Adjusted for minimal commissions gives you a profit of 700%.

In just over two months!

First on the docket is our RRC initiative from February 2^nd.  The letter was called The End of Gas-Powered Profits and it recommended you sell the RRC March 17^th 24/27 CALL spread for $1.05 and buy the RRC March 17^th 24/21 PUT spread for $1.10.  Total debit was $0.05.

With futures essentially flat as we go to press, we see weakness ahead for today’s trade.

That said, we’re still we’re potentially on the hook for a dollar here, so we’re acting thus—

We’re buying back the short CALL for $1.21 and setting the RRC June 16^th synthetic short* using the 24 strike for a credit of $1.00 (3.30/2.30).  That will reduce our debit to $0.26 and give us three months to profit from RRC downside.

*[Sell the 24 CALL and buy the 24 PUT.]

————————————-

On January 30^th our CROX trade arrived in a missive called Crocs Stock Flip-Flops After Shock Sock in the Breadbox!  The trade implored you to sell the CROX March 17^th 120/125 CALL spread for $2.10 and buy the CROX March 17^th 115/110 PUT spread for $2.20.  Total debit was $0.10.

And now…?

CROX is on the verge of a breakdown, so we still like the trade.  But like RRC, above, we could be on the hook for roughly a dollar here, and that’s not to our liking.

So…

We’re buying back the long CALL at the close and setting the CROX June 16^th 120 synthetic short* for a credit of $2.20 (15.00/12.80).

That will put us roughly $1.00 in the black and give us three months to participate in CROX weakness.

*[Sell the 120 CALL and buy the 120 PUT.]

Let Her Rip!

We dealt with our CMC trade on Monday morning, taking in $0.30 NET on the long side of the trade.

And today the short spread expires worthless.

Our 300% gain stands.

Details of our TR trade can be found HERE.

In brief, we’re short TR stock with a $35.79 breakeven.

But TR has yet to cooperate with our desire to see her sink like a stone.

She’s trading at $44.88.

So we wait.

Penultimately…

Our PCG trade’s details can be found HERE.

To sum, we’ve got an open synthetic short on the stock at 15 and a credit of $0.18.

And…?

The stock is still stubbornly trading for $16.16, so we’re buying back the long CALL for $1.20 and resetting the June 16^th 15 synthetic short* for a credit of $0.94 (1.49/0.55).

That will flip our credit to a debit of $0.08 and let us cash in on PCG’s eventual slide.

*[Sell the 15 CALL and buy the 15 PUT.]

————————————-

Finally, our VMI trade, whose details can be found HERE, sees us short one VMI 195 CALL and holding a credit of $4.18.

With the CALL still in ITM, we’re forced to buy it back at the close and resell the September 15^th 195 CALL for $109.00.

Exact tabulation of final credit/debit available after the close.

Praise His Holy Name!

Eschatologically yours,

Alan B. Harvard

Follow @HughLOHaynew