Posted on May 20, 2022
And without further ado: we offer the wins, first, and those that require tweaking, thereafter.
First up is FL, a trade opened earlier this week in A Rose By Any Other Name.
The recommendation was to set the FL May 20th covered CALL using the 31 strike. The shares were then at $29.77, and the 31 CALL went for $1.45. Total debit was $28.32. We also recommended a STOP sell on the shares at $28.32.
FL closed last eve at $30.30, but momentum is clearly up, and S&P futures are up 32 points as we write.
We believe there’s a strong chance the shares will be called away at the close, and we prefer to leave things for that outcome, but…
Should the stock remain below the 31 strike as the day finishes, we’ve given our people instructions to sell our shares at the last moment and take what the market offers.
We’ll be going into Shabbat in Eretz Yisrael when the market is still trading, so a final report on profits will have to wait until Monday.
Best of Icelandic luck.
Next is our DLTR initiative from May 2nd, from which subscribers José from the Netherlands and Pavel D. already cashed in big.
The letter was called Money Doesn’t Grow on Trees and it urged you to sell the DLTR May 20th 157.50/160 CALL spread for a credit of $1.20 and buy the DLTR May 20th 160/157.50 PUT spread for $1.25. Total debit was $0.05.
With DLTR opening trade today at $135.57, we don’t see a reasonable chance of the shares retaking the $157.50 level.
So we’re sitting tight.
By day’s end we expect to capture the full $2.45 on offer.
And that should provide a surreal 4900% gain.
In less than three weeks!
May you all be as fortunate as José and Pavel.
And kudos to all who took multiples of the trade.
GIS, too, is ready for closure, even though it still has a month remaining before expiry.
The communiqué (May 12th) was called Kix, Chex, Trix: They Call it Food, And We Eat it, and it urged you to sell the GIS June 17th 70/72.50 CALL spread for $1.25 and buy the GIS June 17th 72.50/70 PUT spread for $1.30. Total debit on the affair was $0.05.
And now we say good night.
The short CALL spread can be closed for a debit of $0.50 (0.70/0.20), and the long PUT spread for a credit of $1.80 (6.40/4.60).
Get it done and you NET $1.25 on a nickel spent in a measly week!
That’s 2500%, good Jews, and it’s better than a Tyson hook to the cheek.
Love to hear from those who won.
On December 23rd we issued a wager on CVS in Rhode Island Red Zone, wherein we recommended the sale of the CVS May 20th 100/105 CALL spread for $1.95 and the purchase of the CVS May 20th 97.50/87.50 PUT spread for $3.22. Total debit was $1.27.
With CVS now at 93.14, we’re ITM and advise closing the trade at the open.
Sell the PUT spread for $4.19 (4.25/0.06) and leave the CALL spread to wither, and you walk with $2.92 NET on $1.27 spent.
And that’s an illustrious profit of 230%.
Details of our CHD trade can be found HERE.
In sum, we’ve got a credit of $4.15 and are holding the May 20th synthetic short with the 85 strike.
With CHD closing last eve at $88.22, the trade is now profitable – if the spreads on the options co-operate (as of last night, they were not behaving).
ACTION: Should CHD remain below $89.15 toward the close, leave it and take whatever profit’s on offer.
Should she move strongly above that level, institute the following corrective:
Sell the July 15th 90/95 CALL spread for a credit of $0.90 (2.65/1.75). That will reduce our (potential) debit and push us further toward profitability.
As always, more after the close.
Better Than a Mouthful of Matza was delivered on April 14th and featured our AEO trade.
You’ll recall that we recommended a covered CALL on AEO using tonight’s 19 strike. The stock was then at $17.47 and we sold the option for $0.47. Total debit was $17.00.
Since then, the stock has declined, but the story remains the same.
With the shares now at $13.43, we’re angling to lower our adjusted cost base for the shares by selling the August 19th 16 CALL for $0.75.
That reduces our outlay on the trade to $16.25, and offers us good profit potential on any AEO pop through the summer.
Next up is our March 21st ADM wager, from Invasion of the Wheat Snatchers, wherein we advised you to sell the ADM May 20th 80/82.50 CALL spread for $1.20 and buy the ADM May 20th 82.50/80 PUT spread for $1.30. Total debit was a dime.
Today, ADM opens slightly above our CALL spread (at $83.86), putting it squarely ITM and forcing us to act.*
Momentum on the stock is clearly lower, so we’re advising as follows –
Set the ADM synthetic short with split strikes using the September 16th expiry. Sell the 90 CALL for $3.70 and buy the 75 PUT for $3.20. Set a STOP buy on the shares at 90 to avoid adding to the debit.
That will lower our negative balance on the trade to $2.10 and allow us to participate in any coming ADM downside.
[*Setting the synthetic short is contingent upon the stock remaining above $82.50. Should ADM trade strongly lower – toward $80 – we say leave it until the close, and take whatever profit is on offer.]
Our ABBV trade, from Jews Pull Off Massive Profit Snatch (March 3rd) requires some work.
The trade urged you to sell the ABBV May 20th 140/145 CALL spread for $3.15 and buy the May 20th 145/135 PUT spread for $3.43. Total debit on the affair was $0.28.
ABBV is moving lower properly, but she’s going to close this eve with the short CALL spread ITM, adding five points to our existing debit.
Again, we’re moving with a synthetic short with split strikes using the August 19th expiry.
Sell the 165 CALL for $2.66 and buy the 130 PUT for $2.24.
Set a STOP buy on the shares at 165 to prevent adding to the debit.
That will reduce our balance on the trade to -$4.86 and give us full downside participation.
Our COP bet arrived in ConocoPhilips now offering 1823% and urged you to sell the COP May 20th 91/96 CALL spread for $2.05 and buy the COP May 20th 93/88 PUT spread for $2.31. Total debit was $0.26.
And now, with the short CALL spread ITM, we’ll likely be adding $5.00 to our existing debit.
To solve for that, we’re recommending you set the COP July 15th synthetic short with split strikes for a Net Zero outcome. Sell the COP 115 CALL for $3.05 and buy the COP 92.50 PUT for the same $3.05. Open a STOP buy order at 115 to avoid any chance of loss.
We’ll know more, of course – and keep you posted – in the fullness of time.
Our XOM trade particulars can be found HERE.
In brief, we’re holding the 82.50 synthetic short that expires tonight and a credit of $1.28.
Tonight’s close should find our short CALL ITM by roughly $8.50.
So we’re moving like this –
With oil on the verge of a pullback, we see it wise to set the June 17th synthetic short with an 85 strike** for a credit of $6.12 (7.60/1.48).
That will reduce our debit to roughly $2.38 (with more details after the close).
The Jews make war on Pharma Scammers heralded our MCK trade, in which you were urged to sell the MCK May 20th 250/260 CALL spread for $4.40 and buy the MCK May 20th 250/240 PUT spread for $4.60. Total credit was $0.20.
Tonight’s close will find our short CALL spread ITM, flipping our credit to a debit of $9.80.
And that’s why we’re acting as follows –
We’re setting the MCK August 19th 310 synthetic short for a credit of $7.40 (24.60/17.20). Sell the CALL and buy the PUT.
And watch for more details in the coming week.
Details on our HSY trade can be secured HERE.
We’ve got a $1.80 credit and the 170 synthetic short closing this eve.
And again, we’re going to end the day with the short CALL ITM.
With HSY dropping 10% in just the last three days, we have the direction right, and we’re moving as follows –
We’re resetting our HSY 170 synthetic short with the August 19th strike for a credit of $33.70 (36.90/3.20).
We’ll know more at the close, but that should reduce our existing credit to roughly $1.00.
Our VMI trade requires a tweak.
We’re holding a credit of $0.75 and the May 20th 200 synthetic short.
Like HSY, the short CALL will end up ITM at the close, so we’re acting like this –
We’re resetting the VMI synthetic short at 195 using the September 16th expiry, for a credit of $50.10 (55.50/5.40).
That will expand our credit by roughly $2.00 to $2.75.
We’ll know exactly after the close.
Our SEE trade has us holding two short 60 CALLs expiring this eve, and a credit of $1.68.
With SEE closing last night at $59.81, this one’s too close to call.
Should price remain below the 60.50 line, leave her be, and take what you’re given at the close.
Should she move markedly higher, sell the June 17th 60/65 CALL spread for a credit of $1.40 (2.10/0.70).
That’ll pull things strongly back into the positive.
Our ESI wager needs a fix.
We’re in possession of the May 20th synthetic short at the 20 strike and a debit of $3.30.
ESI closed last eve at $19.93 and looks on the verge of a nose-dive.
That notwithstanding, we have to extend the trade somewhat longer to cash in on the decline.
ACTION: set the August 19th 20 synthetic short*** for a debit of $0.30 (1.60/1.90) and sell the August 19th 22.50 CALL for $0.55.
That reduces the debit to $3.05 and leaves the downside open to profits.
Hugh L. O’Haynew