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September OPEX – The Turmoil Proliferates (ATI, BTI, HRB, POST, COOP, CXM, BITO, VMI)

Posted on September 16, 2022

We’re jumping right into September expiry with a back-to-school splash that would make a Harvard upperclassman blanch.

We start with our ATI initiative from August 15th.  The letter was called Turning Their Weapons Against Them, and it urged you to short ATI stock at $31.41, buy the September 16th 35 CALL for $0.50, and sell the September 16th 27.50 PUT for $0.40.  Total credit on the affair was $31.31.

And now…?

As we write, ATI is at $30.59, but looks like it still has downside.

So we’re leaving the short open and recommending you reinstate the options to mitigate any potential loss.

Like this –

Buy the October 21st 35 CALL for $0.65 and sell the October 21st 27.50 PUT for $0.60.

That moves our breakeven to $31.26 and leaves the downside open to profits (while protecting us against any runaway loss).

Stay tuned, you 10,000 men of Harvard.

NEXT!

On August 11th we smoked the BTI pipe in a missive called Get Some Tobacco, Your Weight Loss Wonder Cure!  The trade recommended you sell the BTI September 16th 40/45 CALL spread for $1.10 and buy the BTI September 16th 40 PUT for $1.05.  Total credit was $0.05.

And today, the stock is trading at $39.36, meaning our PUT is in-the-money.

How far she dumps is anyone’s guess.

ADVICE: sell on any intra-day weakness, or, in the event of a steep decline at the open, leave it run until the close.

And best of British (Tobacco) luck to ya.

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Our HRB bet was delivered on July 25th in a dispatch called ‘Cause I’m The Tax Man.

There, we elbowed you into selling the HRB September 16th 38/42 CALL spread for $1.25 and buying the HRB September 16th 37/33 PUT spread for $1.25.  Net zero premium was the result.

And now, she’s like this…

HRB closed last eve at $44.98, meaning we’re likely going to be on the line for the full value of the short CALL spread at the close.

We’re therefore advising thus –

HRB is on its way to 40 quick, and thereafter to 36.  So, we see great value in extending the trade and cashing in on the slide.

Like this –

Set the HRB October 21st 41 synthetic short for a credit of $3.90 (4.50/0.60).

That will all but erase the debit (reducing it to just $0.10) and leave us exposed to profit on the downside.

Set a STOP buy on the shares at $49.10 to avoid any runaway loss.*

*Should the STOP be tripped, you will have to reinstate a STOP sell at the same level.  And if that order is filled, you’ll have to reinstate the original STOP buy again at $49.10.  An open STOP at that level should be in place until the trade is closed.

Ditto for our POST trade, which landed in your inbox on July 21st.

The communiqué was called They’re at The Post – and They’re Soggy, and it suggested selling the POST September 16th 80/85 CALL spread for a credit of $2.20 and buying the POST September 16th 85/80 PUT spread for $2.70.  Total debit on the affair was $0.50.

And today, with the stock trading at $87.23, we’re going to expire with a debit of $5.00 from the short CALL spread.

Again though, POST is hanging on to its current price level by a thread.

So…

We’re recommending you –

Set the POST January 20th 80 synthetic short for a credit of $7.20 (10.70/3.50).*

That will flip the debit to a credit of $1.70, and open the way to a profit.

N.B.: Set a STOP buy on the shares at $92 to avoid any runaway loss.*

*Should the STOP be tripped, you will have to reinstate a STOP sell at the same level.  And if that order is filled, you’ll have to reinstate the original STOP buy again at $92.  An open STOP at that level should be in place until the trade is closed.

Moving on!

Our July 11th letter was On the Mortgage Thievery Front, and it featured our COOP trade.

The idea was to set the COOP September 16th 40 synthetic short for a debit of $3.00 (and place a STOP buy on the stock at $40).

And now…?

With COOP at $44.34, our shares will very likely be called away and we’ll be sitting on a $3.00 loss.

So…

We’re recommending you –

Reset the COOP October 21st 40 synthetic short for a credit of $4.20 (5.30/1.10).

That will reverse our debit to a credit of $2.20 and pave the way for a profit on the trade.

N.B.: Set a STOP buy on the shares at $48 to avoid any runaway loss.*

*Should the STOP be tripped, you will have to reinstate a STOP sell at the same level.  And if that order is filled, you’ll have to reinstate the original STOP buy again at $48.  An open STOP at that level should be in place until the trade is closed.

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Our CXM initiative, whose details can be found HERE, sees us holding a debit of $2.77 along with a short 10/12.50 CALL spread and two long 10 PUTs expiring this eve.

CXM plumbed as low as $10.34 yesterday, but whether she’ll continue her decline today is hard to say.

So, with CXM now trading at $10.71, we’re recommending you set the CXM November 18th 10 synthetic short for a credit of $0.65 (1.40/0.85).

That reduces our debit to $2.15 and leaves the downside open to profits.

We penned Bitcoin Was Never Money, But Was Always Worth a Trade on June 20th, urging you to buy the BITO September 16th 14/18 CALL spread for $1.10 and sell the BITO September 16th 11/6 PUT spread for $1.11.  Credit on the trade was a penny.

BITO closed last eve at $12.16, and it appears our options will expire worthless.

Chalk it up as a penny earned.

Now in the Docket…

Details on our VMI bet can be pulled up HERE.

In brief, we have a credit of $2.94 and a synthetic short with a 195 strike expiring this evening.

And…

At the close we’re going to be on the hook for a loss on the short 195 CALL.

So…

We’re recommending you buy back the CALL and sell the VMI March 17th 195 CALL for $83.

That will expand our credit to $4.18 and give us a little more time to knit.

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And that’ll do it.

May the Good Lord grant us a large dose of chesed and rachamim, because we’re ALL doing better than we deserve.

Eschatologically yours,

Alan B. Harvard

 

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