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TRADE BULLETIN: February Options Expiry – And Some Fat Profits Booked! (STNE, CELH, BLL, FCX, WDFC, FIZZ, ALB)

Posted on February 19, 2021

A number of trades require your attention on this third Friday of February, so without further ado…

Our January 7th initiative arrived in a letter called Stoneco is Not a Marijuana Stock.  There, we urged you to buy the STNE February 19th 77.50/67.50 PUT spread for $3.95.

And today, the spread is out-of-the-money.

But our outlook hasn’t changed.  So we’re urging you to set the STNE April 16th 87.50 synthetic PUT (sell the 87.50 CALL, buy the 87.50 PUT) for a credit of $2.50 (10.00/7.50).

That reduces our debit to $1.45 and opens the downside to unlimited profit.

Place a STOP buy order on STNE stock at $97.50.  Should the stock move through that level and the STOP get tripped, reset with a STOP sell at the same $97.50.  An open STOP order must always be in place to keep the trade square.

NEXT!

Back on 24 December we recommended a CELH trade in Drink Poison, Lose Weight, Die Young.  The recommendation was to sell the CELH January 15th 45 PUT FOR $5.50, and buy the CELH February 19th 45 PUT for $8.00.  Total debit on the affair was $2.50.

The January PUT expired worthless, and today’s open 45 PUT is now likely to close out-of-the-money.

But here, too, we like the downside.

So we’re acting as we did with STNE, above, by setting the CELH April 16th 55 synthetic PUT for a credit of $3.30 (10.70/7.40), offering us renewed, unlimited downside exposure and a new credit on the trade of $0.80.

Set a STOP buy at 70, and, as above, be sure to maintain an open STOP order through expiry, exactly as described above.

One Man’s Bounce is Another Man’s Burden was our bet on BLL, which had you sell today’s 92.50/97.50 CALL spread for $2.20 and buy the 92.50/82.50 PUT spread for $3.00.  Total debit on the affair was $0.80.

And today, things look positive.

With the stock closing last night at 90.37, and S&P futures pointing lower overnight, it appears we’ll walk with something.

We’ll be moving into Shabbat as New York opens, so you’re on your own here.

Consider selling the long 92.50 PUT on any steep move lower during the session.

Lots of mazel to all.

On January 3rd, we wrote Defund the Coppers, with FCX as the underlying, asking you to sell the February 19th 23/26 CALL spread for $1.28 and buy the FCX February 19th 25 PUT for $2.80.  Total debit was $1.52.

As we head into expiry, the price of copper is up, but the move is wholly speculative, in our humble purview.  And that means we still like the pullback scenario.

But what to do about that short 23/26 CALL spread, that’s about to leave a dent of $4.52 in our wallet?

We’re moving like this –

We’re setting the FCX May 21st 30 synthetic PUT for a credit of $3.87 (6.25/2.38), reducing our debit to $0.65 and exposing ourselves to the full downside potential.

Set a STOP buy on the shares at $37.00.  All the same rules apply from STNE, above.

Almost there…

Our WDFC trade, the details of which can be found here, currently carries a debt position of $0.80 and an open 250 synthetic short position that expires this eve.

As of this writing, the short 250 CALL is deep in-the-money, and has to be rolled out.

It currently sells for $74.60.  Buy it back directly before the close and sell the August 20th WDFC 240 CALL for $83.10.  That flips the debit to a credit of $5.70.

———————————————————–

Last of the February expiries is our FIZZ initiative, on which we have a debit of $2.60 and an open synthetic short position at 70.

The short 70 CALL is in-the-money and needs rolling.

Buy it back just prior to the close for $33.60 and sell the FIZZ July 16th 65 CALL for $37.50.

The debit is thereby flipped to a credit of $1.30.

And One More.

Our ALB trade arrived on January 14th in If It’s Lithium It’s a Buy, wherein we urged you buy the ALB June 18th 170 PUT for $20.30 and sell the June 18th 155 and 110 PUTs for $13.30 and $3.00 respectively.  Total debit on the trade was $4.00.

As of today, the price has dropped dramatically and the 170/155 spread is worth $10.00.

We’re recommending you take it, putting you in the plus column by a big $6.00, and leaving the 110 PUT to wither.

An interim congrats to RJM and Partners who first offered the tip on ALB.

We’ll keep you posted regarding the 110.

Along with our coming victory over Amalek!

Eschatologically yours,

Alan B. Harvard

 

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