Posted on October 21, 2022
Gonna be brief today.
We’ve got two trades delivering boogaloo profits and a third that might well do the same.
So straight to it—
We start with our XPEL trade, sent on September 8th in a dispatch called Expel the Interloper; Seize Him by the Jackminster!
There, we urged you to sell the XPEL October 21st 60/65 CALL spread for $2.10 and buy the XPEL October 21st 65/60 PUT spread for $2.45. Total debit on the affair was $0.35.
With the stock trading at $60.18, we’re looking great.
Sell the PUT spread for $4.76 and buy back the short 60 CALL for $0.40.
That will put $4.01 NET in your pocket, making for a win of 1145%.
In only six weeks…
Next on the docket is our September 1st bet, called Today’s trade has no Dermatological Side Effects.
There, we recommended you sell the WSC October 21st 40/45 CALL spread for $1.60 and buy the WSC October 21st 40/35 PUT spread for $1.55. Total credit was a nickel.
WSC is trading right at our breakeven point.
So what do we do?
Hard to figure.
Momentum is clearly to the downside, with the stock dumping almost 10%, peak-to-trough in just the last three sessions.
And with today’s expiry, things could magnify.
Our best advice would be to watch the open. S&P futures are down marginally as we go to press, but they should give an indication of which way we’re headed as trading starts.
If you’re in defensive mode, close the 40’s (PUT and CALL) on any weakness.*
If you’re feeling more aggressive, let them ride through the close.
If the stock rises strongly out of the gate, consider buying back the short CALL early.
Either way, we’re likely looking at a marginal gain or loss on the day.
Our TWI initiative, whose details can be found HERE, has us holding a credit of $1.10 and one short 15 CALL expiring this evening.
With the stock now trading at $13.02, there’s nothing to do but leave her be.
At day’s end we’ll be up 92% on the trade.
And that’s reason enough for a tall chilly of bourbon.
Alan B. Harvard