TRADE BULLETIN: March Expiry Leads to a Chicken in Every Pot! (SJM, WIX, XLF, GM, RVLV, ETSY, THRM/SPXS, AM, CPRT, KTB, IBP, CROX, FBHS, DE, IYT/DIA, WMS, TTC, SAIA)

Numerous trades to tend today, so without further ado…

We launched an SJM initiative on February 11^th called Peanut Butter and Jam Flying Everywhere – Smucker’s Goes Spastic!, in which we urged you to sell the SJM March 19^th 105/125 strangle for $2.05 and buy the April 16^th 105/125 strangle for $5.55.  Total debit was $3.50.

Today, we’re recommending you sell the April 125 CALL for $2.55.  That brings our debit down to $0.95.  Hold the April 105 PUT for now.

Next!

Our WIX trade arrived on February 1^st in Are You a Party to the Destruction of Wall Street? In which we recommended you buy the WIX March 19^th 230 PUT for $14.90 and sell the WIX March 19^th 200 PUT for $3.40.  Total debit on the trade was $11.50.

Today, with the PUTs trading OTM, we’re setting the WIX July 16^th 280 synthetic short for a credit of $15.10 (44.10/29.00).  That flips our debit to a $3.60 credit and opens up the full downside potential on a WIX decline.  On Monday, we’ll set a STOP buy on the shares (after today’s closing numbers are in).

Are Bank Employees Agents of SATAN!? (XLF) was our January 25^th directive, inn which we suggested you consider selling the XLF March 19^th 31 CALL for $0.82, and buying XLF March 19^th 34 CALL for $0.19 and March 19^th 29 PUT for $0.69.  Total debit on the trade was $0.06.

It appears we’ll take the full CALL spread loss of $3.00 at day’s end.  But before we get there, we’d advise you to set the June 18^th XLF 32 synthetic short for a credit of $2.24 (3.15/0.91).  That will reduce our debit on the trade to 0.82 and open full profit potential on an XLF decline.  STOP to come on Monday.

Moving right along…

GM was the object of The Company That Cannot Fumble, our communiqué from January 19^th.  The letter urged you to sell the GM March 19^th 60 CALL for $1.26 and buy two (2) GM March 19^th 40 PUTs for $0.60 each.  Total credit was $0.06.

With GM trading at $59.27 and futures pointing to a flat to lower open, we say leave it.  Toward the close, you may have to buy back the short CALL for a few cents.  You might see the loss of a dime here.  Or a gain of six cents.

Make sure all STOPs are OFF when the trade closes.

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We traded RVLV on January 11^th in You Say You Want a Revolution…  The missive urged you to sell the RVLV March 19^th 30/35 CALL spread for $2.10 and buy the RVLV March 19^th 30 PUT for $2.50.  Total debit was $0.40.

It appears at this hour that the CALL spread will earn us a loss of $5.00.  To offset this, we recommend you set the June 18^th 45 synthetic short for a credit of $5.70 (10.80/5.10).  That will flip our debit to a credit of $0.30 and leave us open to profit from RVLV’s decline.

STOP to come on Monday.

And Now…

January 4^th brought you Etsy Debts Test Bullish Bets, wherein we recommended the purchase of the ETSY March 19^th 165/155 PUT spread for $4.45.  As of last eve, the spread is OTM, so we’re setting the ETSY June 18^th 200 synthetic short for a credit of $9.20 (32.05/22.85).  That flips our debit to a credit of $4.75 and sets us up to profit from an ETSY decline.  More to come Monday.

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Our THRM/SPXS pairing was sent on December 21^st in Hot Soup for a Cold Market, and urged you sell shares of THRM for $65.14 and purchase ten (10) SPXS March 19^th 4/6 CALL spreads for $0.38 each.  A STOP buy on THRM shares was recommended at $68.00.

With the spreads expiring OTM and the THRM STOP triggered, we’re in a debit position of $6.66 on the trade.  Close all open orders on THRM at the open and set the THRM April 16^th 70 synthetic short for a credit of $6.90 (8.00/1.10).

That will give us a net credit going forward of $0.24 and open the door to some downside profits.

This Energy Stock Outswam the Pack, And Now It’s Floating Face-Down in the South Platte River was the long-winded title of our December 17^th trade on AM.  The recommendation was to set the AM March 19^th synthetic 7.50 short for a $0.20 credit and the AM June synthetic 7.50 long for a $0.70 debit.  Total debit was $0.50.

Today, we recommend you close the June CALL option at the open for $1.30, and today’s (March) CALL at the close for (hopefully) much less.  We’re estimating you’ll take in something like $0.30 or $0.40 for your effort and offset the initial debit.

Leave the PUTs in place for the meantime.

OK…

Our CPRT trade, the details of which can be found HERE, shapes up as follows –

We’re sitting on a sizeable credit of $6.30 and are holding a short 110 CALL that expires this eve.

With the stock closing last eve at $109.01, we feel safe leaving it be.  If it trends above 110 toward the close, buy it back.

We’ll comment on Monday when the numbers are in.

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The details of our KTB trade can be found HERE.  In short, we’re holding the March 19^th 40 synthetic short and a debit of $3.20.

Because the short CALL is deep ITM, we’re recommending you wait until the close – or on any sign of weakness during the session – and buy it back.  In the meantime, sell the KTB October 15^th 35 synthetic short for a credit of $17.00 (19.20/2.20).  That should put us very close to breakeven for the trade and still leave potential for profits on any decline.

Check back Monday for the nitty-gritty.

Kitty.

Our IBP trade details can be found HERE. To sum, we’re holding two short 90 CALLs expiring this eve and have a credit in hand of $4.37.

Because the CALLs are ITM, we recommend you wait ‘til the close (or on any weakness during the session) to buy them back for approximately $19.00 each, and sell two (2) June 18^th 90 CALLs for $22.40 each.

That will leave us with a credit of roughly $11.17.  Final numbers Monday.

Our CROX, trade, the details of which are accessible HERE, has us in possession of today’s 50 synthetic short and a credit of $5.35.

With the short CALL deep ITM, we’re recommending you buy it back toward the end of the session for roughly $27, and reset the May 21^st 50 synthetic short for a credit of $26.40 (27.20/0.80).  Check back Monday for final tallies, credits, etc.

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FBHS’ trade details can be found HERE.  In short, we’re holding today’s synthetic 80 short and a debit of $1.40.

With the short CALL ITM, we urge you to wait until the close (or on weakness) to buy it back for roughly $11.00, then reset the June 18^th 80 synthetic short in its place for a credit of $10.60 (13.00/2.40).

That will leave us exposed to profits from a downside move and push our debit toward $2.00. Stay tuned Monday for all the exact numbers.

Next!

Our DE trade’s details can be found HERE, and can be summed thus – we’re holding tonight’s 250 synthetic short and a credit of $1.60.

Because the short CALL is deep ITM, we’re recommending you buy it back at the close for roughly $130 and sell two (2) DE June 18^th 300 CALLs for $81.35 each.

That will expand our current credit to roughly $34.00.

Full details on Monday.

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Our IYT/DIA pairing of October 19^th had you sell the IYT March 19^th 215/220 CALL spread for $1.40 and buy the DIA March 19^th 290/295 CALL spread for $3.20.  Total debit on the affair was $1.80.

Both spreads are in the money and will therefore produce a wash.  We’re moving to erase the initial debit as follows –

We’re selling two (2) DIA April 1^st 335 CALLs for $1.76 each.  That will offer us a profit on the trade of exactly $1.72 if they expire twelve days from now OTM.

Beat’s a punch in the nose.

Our WMS trade was last updated HERE and breaks down as follows – we’re holding the 75 synthetic short that expires this eve and a debit of $0.65.

The short CALL should end ITM by roughly $27, and we’re therefore urging you to buy it back at the close (or on any bout of weakness) and sell two (2) May 21^st 85 CALLs for $19.50 each.

That puts us in a net credit position of roughly $12.00 and gives us another 60 days to profit from a decline.

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The particulars of our TTC trade can be gotten HERE.

To sum, we’re holding tonight’s 80 synthetic short and a debit of $0.30.

And because the short CALL is in-the-money, we’re recommending you buy it back at the close for roughly $24 and set the September 17^th synthetic short at 75, for a credit of $26.85 (27.80/0.95).

That puts us in a net credit position of roughly $3.15 and offers us full participation in any decline.

Check back Monday for full details.

Okey dokey, Smokey!

Details of the SAIA saga can be accessed HERE.  To sum, we’re holding the 145 synthetic short that expires this eve and a debit of $25.20.

The short CALL is now ITM, so we’re recommending you wait ‘til the close to repurchase it for roughly $75 and sell two (2) June 18^th 165 CALLs for $55.90 each.

That will flip our existing debit to a credit of roughly $10.80.

And may the Holy One bless us all!

Eschatologically yours,

Alan B. Harvard

 

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