Posted on February 21, 2020
A raft of trades now require your attention, Sergei.
So rip off that collagen mask and pull out a pen.
We start with our MKTX trade, originally opened on May 20th of last year, all the details of which can be found here.
To sum it, we’re short the MKTX 330 CALL that expires Friday at the close, and our breakeven for the trade is $344.05.
MKTX closed last night at $344.60.
We’re not taking any chances.
We’re recommending you roll the trade another month:
Buy back your MKTX February 21st 330 CALL for $16.50 and sell the March 20th MKTX 330 CALL for $17.90. In so doing, you buy a month’s leeway, add $1.40 to your credit and raise the breakeven to $345.45.
Exactly three weeks ago, we issued a call to buy the warrants on Canadian digger, Gran Columbia Mines (TSE:GCM.WT.B). The stock has moved nicely higher since then – and the warrants even more. The original trade recommended you purchase CA:GCM.WT.B warrants for $3.40 CAD.
The warrants sell for $4.60 each, though it appears they got ahead of themselves.
We say cash them in. That’s $1.20 netted on $3.40 spent, or better than 35%.
In just three weeks!
Annualized, that’s equivalent to 600%!
And that’s cash, baby.
We opened a State Street (NYSE:STT) trade on February 3rd that’s moved sideways ever since. The trade recommended you consider selling the STT February 21st 77.50 CALL for $1.10 and buying the STT February 21st 82.50 CALL for $0.19. We then urged you to use the funds to buy the STT February 21st 72.50 PUT for $0.92. Total debit on the initiative was a penny.
In early morning trade today (Friday), futures are down sharply, and the technical picture for the stock remains weak.
We’re advising you to leave this one to expire.
The greatest likelihood is that all options will die worthless.
Update on Monday.
Dirty Rotten Apple was delivered to your inbox on November 25th with a trade on AAPL that now needs to be rolled.
The original rec suggested you sell the AAPL February 21st 255 CALL for $16.87 and buy the AAPL February 21st 265 CALL for $12.05. With those funds, we recommended you purchase the AAPL February 21st 235 PUT for $4.85. Total debit was $0.03.
On closing today, we’ll have a net $9.97 loss on our hands, and that hurts.
It’s a rarity, but it happens.
Best sometimes just to take one’s lumps and move on.
We opened a BMY trade back on November 4th, all the details of which can be found here.
As of this writing, we are short the February 21st 60 CALL.
Buy it back today for $5.25 and sell the BMY March 6th 60 CALL for $5.20 and you snag another two weeks to pull clean. Your credit on the trade drops from $0.12 to $0.07.
And with that, we wish you and yours abundant livelihood and stellar health.
Alan B. Harvard