Posted on May 19, 2023
We start with our LLY trade of April 19th. The letter was called Harmaceutical Giant Lilly Takes a Dip, and it urged you to sell the LLY May 19th 380/390 CALL spread for $2.20 nd buy the LLY May 19th 350/340 PUT spread for $2.85. Total debit was $0.65.
Our short CALL is now in-the-money and has to be dealt with.
Because we’ll end up in a debit position of exactly $10.65 at the close, we’re moving as follows—
We’re setting the LLY September 15th 430 synthetic short* for a credit of $13.50 (32.75/19.25).
That will flip our debit to a credit of $2.85 and give us four more months to fight.
Next up is our IRDM initiative. The missive was entitled The Holy One of Israel Levels Mountains…, and there we recommended you sell the IRDM May 19th 60/65 CALL spread for $1.85 and buy the IRDM May 19th 60/55 PUT spread for $1.70. Total credit was $0.15.
With the stock closing last night at $59.35, our long PUT is in-the-money, but whether it remains as such is anyone’s guess.
As we write, S&P futures are essentially flat, so you’ll have a choice when the open hits to either:
For our part, we’re holding to the close.
On March 30th our WYNN trade landed in your inbox, in a communique called WYNN—Lose. The idea was to sell the WYNN May 19th 110/115 CALL spread for $2.10 and buy three WYNN May 19th 100/97.50 PUT spreads for $0.70 each. Net Zero Premium was the result.
Last eve, WYNN closed at $110.30, making it another borderline case, as the short CALL is now $0.30 ITM.
Here, too, we leave it to you to either:
And may G-d be with you!
Pseudo-Health Only Lasts Until the Doorbell Rings contained our BRBR trade from March 6th, which detailed the sale of a BRBR May 19th 30/32.50 CALL spread for $0.90 and purchase of a BRBR May 19th 30/27.50 PUT spread for $1.00. Total debit was $0.10.
It appears our short CALL will end up in-the-money at the close, leaving us with a debit of exactly $2.60.
We’re therefore forced to move.
ACTION: sell two (2) November 17th 35 CALLs for $3.90 each. That will flip our debit to a credit of $5.20 and give us a half year to rake in a good haul.
February 13th was the occasion of our COTY trade that came in a dispatch called Coty Slaps Lipstick on a Porcine Profit. The recommendation was to sell the COTY May 19th 10/11 CALL spread for $0.48 and buy the COTY May 19th 11/10 PUT spread for $0.53. Total debit was $0.05.
This one is too close to call. With $11.00 being the upper pivot and price closing last night at $11.33, it could be we’ll be on the hook for a dollar.
So we’re acting thus—
We’re leaving the trade open through the close in the expectation that we’ll be on the hook for the full $1.05.
At the same time, we’re remedying the loss by setting the COTY November 17th 10 synthetic short* for a credit of $1.46 (2.11/0.65).
That will flip the debit to a credit of $0.41.
COTY will slide to $10, at least, and we should see a nice gain in the end.
Next up was our November 17th directive that went by Peeling Off the Mask… We urged you there to sell the ELF May 19th 55/60 CALL spread for $1.40 and buy the ELF May 19th 50/45 PUT spread for $1.95. Total debit on the day was $0.55.
This morning our short CALL spread is in-the-money, so we’re on the hook for the full $5.00.
And that has to be fixed.
So, we’re setting the ELF November 17th 85 synthetic short for a credit of $6.70 (15.70/9.00).
That will give us another six months to profit from the coming downside AND flip our debit to a credit of $1.15.
Our AEO covered CALL trade’s details are available HERE.
In short, we’re holding one lot of stock with a breakeven of $14.29 and a short 15 CALL that expires tonight.
With AEO closing last night at $13.39, and the short CALL almost certainly expiring OTM, we’re going to be selling YET another CALL to push our breakeven ever lower.
We recommend you sell the AEO November 17th 14 CALL for $1.49.
That will reduce the B/E to $12.80 and offer us another half year to rake in a profits.
The particulars of our HSY trade can be found HERE.
In brief, we’re in possession of two May 19th 190 CALLs and a $6.22 credit.
ACTION NEEDED: at the close, or on any mid-session weakness, buy back the short CALLs and sell two more HSY November 17th 190 CALLs for $79 each. That will add another $2.00 to our credit, bringing it to $8.22 and offering us another six months of life.
Finally, our BLDR trade, whose details are available HERE, sees us holding two short 55 CALLs expiring tonight and a credit of $11.99.
ACTION: buy back the short CALLs at the close (or during a bout of intraday weakness) and sell two BLDR November 17th 55 CALLs in their place for $68.20 each. That will add $2.00 to our credit, bringing it to a total of $13.99
And with that, we bid you Shabbat Shalom from the windy hilltops of the Land of Israel.
G-d bless all you good Jews and Noahides.
Alan B. Harvard