Posted on March 6, 2020
The wife just informed me that today will occasion the semi-annual ‘washing of the bath towels’…
In Spain they have their annual ‘running of the bulls’, an event that draws thousands to risk their lives (or just watch others do the same), brings in millions in tourist revenues and garners robust news coverage globally.
But here in our house the program is far more modest.
There won’t be any fanfare. Indeed, the Mrs. assures me that the water employed to launder the towels won’t be excessively hot, either.
Because, as she puts it, “what’s the fun in using a towel if it doesn’t smell like a towel?”
Who knows…? Maybe something will be spawned that immunizes the family against COVID-19.
Two trades to tend for all ye wild horde of profit snatchers!
And they go like this –
First, from our BMY initiative, all the details of which can be found here.
The gist is like this: we’re short the BMY March 6th 60 CALL and the stock closed last night at $60.50.
Will it dump another half dollar before expiry at 4:00 P.M. today?
Do we risk it?
So we roll again?
The CALL now trades for $1.03. Buy it back, and sell the BMY March 13th 60.50 CALL for $1.43. In so doing, you raise the strike, buy another week and add $0.40 to your credit (for a total net of $0.47).
On January 6th you received a memorandum entitled 2020 Vision – Trading The Future of Iraq. There, we advised you to sell a CALL spread and purchase a PUT spread on NOC.
Specifically, we recommended the sale of the NOC May 15th 390 CALL for $14.00 and purchase of the NOC May 15th 400 CALL for $10.70. Then, we urged you to use those funds to purchase the NOC May 15th 380 PUT for $23.10 and sell the NOC May 15th 375 PUT for $20.00. Total credit on the affair was $0.20.
Subsequent to that, we sold the PUT spread for $2.20 and now sit with a total credit of $2.40.
It’s now time to buy back the short CALL spread and shut this one down.
The 390 sells for $2.60 and the 400 goes for $1.40. Buy back the former and sell off the latter and you net $1.20 on nothing laid out. Adjusted for minimal commissions gives you a very sweet, two month profit of 800%.
Annualized (if you’re into that sort of thing), gives you a gain of 3600%!
Let the spinning wheel spin…
Alan B. Harvard