Posted on July 16, 2021
Lots of trades to get to, so let’s roll.
We start with A Fizzy winner.
Our FIZZ trade (whose details are located HERE) fizzles with this evening’s expiry and posts a reasonable profit of $1.30.
And there ends the saga with a 23.5% take.
With the stock at $263.40, and the long option trading for $6.40, we’re looking to cash in.
Sell the 270 PUT and leave the 250 to wither.
You come away with $1.60 NET on $4.80 spent – a gain of 33% in just over a month.
And that’s perfectly fine.
Our SKIN trade came to you on June 28th in a missive entitled When Beauty is Only Skin Deep: The Naked Truth Behind a NASDAQ-Listed Facial Scam.
There, we implored you to sell the July 16th 17.50/20.00 CALL spread for a credit of $0.50 and buy the July 16th 17.50 PUT for $0.85. Total debit was $0.35.
Today, we’re borderline. The stock will see worse days, but it still hasn’t reached our $17.50 tipping point.
And so we’re acting as follows –
Buy back the short 17.50 CALL at the open for $0.65 (or on weakness) and leave the long 20.00 to wither.
That will put us in the hole exactly $1.00 on the trade. And that’s where we’re leaving it.
Call it DONE.
CAG is falling apart and we’re nearly at breakeven, so we’re holding the position. Details on the trade can be found HERE.
You’ll recall that we’re short one lot at $33.50 and holding a long protective CALL that will expire worthless this eve.
We’re also carrying a small debit of $0.15.
In order to cover ourselves and avoid a cataclysmic loss, we need to purchase another long CALL today.
And it’s going to be the CAG July 30th 36 CALL for another $0.15.
That brings our total debit on the trade to $0.30, protects us from any runaway action on the upside, and leaves us exposed to full profits from any decline.
Overbought Equity Mistaken for UFO was our May 10th communiqué, and it recommended you sell the TXT July 16th 65/70 CALL spread for $2.35 and buy FIVE (5) TXT July 55 PUTs for $0.45 each. Total credit was $0.10.
TXT is currently on the verge of a spill, but hasn’t yet declined to pull our short CALL out-of-the-money.
So we’re recommending the following –
Buy back the short 65 CALL for $2.10 and reset the trade with a slight modification –
Sell the TXT September 17th 65/70 CALL spread* for $2.00 (4.40/2.40) and buy the September 17th 55 PUT for $0.65.
That will leave us with downside exposure and an overall debit of $0.65.
The second coming of VMI, which arrived on June 21st in a dispatch called An Encore Performance From the Frenchman, asked you to sell the VMI July 16th 210/220 CALL spread for a credit of $3.90, then purchase the VMI July 16th 220/210 PUT spread for a debit $5.25. Total debit on the affair was $1.35.
VMI closed last eve at $226.28, putting the short CALL spread full in-the-money.
At the same time, the stock is still poised for a whale of a decline.
So we’re extending it thus –
First, let the short CALL spread expire. In so doing, we up our debit on the trade to $11.35.
Next, short one lot of VMI at the current price and buy a protective CALL to avoid any runaway loss – the August 230 CALL for $8.50 is best.
That will put our breakeven at exactly $206.43.
Our BG trade, whose details can be found HERE, sees us short two 60 PUTs expiring this eve and holding a credit of $7.25.
And we need to roll.
Buy back the PUTs for $15.90 each and sell two (2) October 15th 60 PUTs for $15.70 each.
That gives us another quarter to play while reducing our credit to $7.05.
Our bet on KFY, whose details are HERE, has us in possession of a debit of $7.20 and
holding a short in-the-money 65 CALL, expiring at the close.
We also have a long 65 PUT expiring tonight, and with price now at $67.38, it’s hard to know what will happen.
Best to keep an eye, and attempt the following –
Sell the long 65 PUT early (or on intraday weakness) to pocket whatever possible, and buy back the CALL late in the session (or on intraday weakness) to minimize outlay.
We’ll only get final numbers on the close, but it appears we’ll be adding some $2.00 to our debit, for a total of roughly -$9.20.
Short the shares at their current price ($67.38) and buy a protective CALL – the September 17th 70 CALL for $3.40.
That will offer us full downside profitability and a breakeven somewhere around 55 (depending upon this evening’s closing numbers)
We’ll update next week.
We fix our DE initiative, whose details can be accessed HERE.
In short, we’re holding a credit of $2.50 and two short 320 CALLs expiring this evening.
Buy them back for $26.45 each and sell two August 20th 320 CALLs for $29.05 each.
That extends the game by a month and adds to our credit, putting us +$7.70 on the trade.
Alan B. Harvard