Posted on March 17, 2023
We’ve got five trades closing today that require your attention, so listen up good, Clanranald, and take good notes.
We’re closing our AKRO initiative from January 5th. The directive was called Earthquake Destroys San Fran’s Akero Therapeutics, and it urged you to sell the AKRO May 19th 70 CALL for $3.80 and buy the AKRO May 19th 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 2nd. The letter was called The End of Gas-Powered Profits and it recommended you sell the RRC March 17th 24/27 CALL spread for $1.05 and buy the RRC March 17th 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 16th 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.
On January 30th 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 17th 120/125 CALL spread for $2.10 and buy the CROX March 17th 115/110 PUT spread for $2.20. Total debit was $0.10.
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.
We’re buying back the long CALL at the close and setting the CROX June 16th 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.
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.
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.
The stock is still stubbornly trading for $16.16, so we’re buying back the long CALL for $1.20 and resetting the June 16th 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.
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 15th 195 CALL for $109.00.
Exact tabulation of final credit/debit available after the close.
Alan B. Harvard
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