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TRADE BULLETIN – Three Turkeys to Tend This Black Friday (EXPE, IBP, CROX)

Posted on November 27, 2020

We lead with our Expedia (EXPE) adventure, launched last week with the expectation of an immediate decline…

You’ll recall the trade asked you to sell the EXPE November 27th 105 CALL for $14.50 and buy the EXPE November 27th 105 PUT for $0.27.  Then, to purchase the EXPE November 27th 120 CALL for $2.59.  Total credit was $11.64.

With the short CALL spread still in-the-money, we recommend you buy it back for $16.80 (20.00/3.20) and sell the EXPE January 15th 110 synthetic short for $13.05 (sell the 110 CALL [16.05] and buy the 110 PUT [3.00]).  And to protect the short CALL, purchase the January 15th 125 CALL for $7.75.

That reduces your credit to $0.14, but still leaves the downside open to profits.

Next!

Our IBP trade was opened November 9th and her details can be found here.

In short, we set a STOP buy order for the shares at 106 and got bought in.

To deal with that reality, we recommend you now sell the shares (currently at $101.09), sell the January 15th IBP 100 CALL for $6.00, and set a new STOP buy at 106.

That ups our credit on the trade to a revised $1.09 and leaves the downside profit potential in place.

**NOTE: to keep the trade square, you’ll have to set a STOP sell at the same 106 if you’re bought in again.  And if that gets tripped, you’ll have to set another STOP buy.  And so on…

If you’re a man… might as well behave like one.

We still believe in the CROX downside story, but in the meantime, we also got bought in at $62.

With CROX now trading at $59.98, and our current credit on the trade at $7.90, we’re acting as follows.

As we did with IBP, we’re selling the shares, selling the December 18th 60 CALL for $2.80 and setting a new STOP buy order for the stock at 64.

That ups our credit on the trade to $8.68 and leaves the downside open to profits.

As you did with IBP, reset a STOP sell order on the shares if you get bought in (at 64).  Then reset a STOP buy if the sell order gets tripped.

And so on…

Until the Holy day of the Lord arrives…!

It won’t be long, troops.

Eschatologically yours,

Alan B. Harvard

 

4 responses to “TRADE BULLETIN – Three Turkeys to Tend This Black Friday (EXPE, IBP, CROX)”

  1. M T says:

    Interesting looking candles last few days on CROX/IBP – in a time when everything just seems so streeeeeeeeeetched. Starting to stagger here? We can hope!

    Shabbat Shalom
    MT

  2. Alan B. Harvard says:

    bs’d
    Indeedy do, MT.
    Matt informs me there’s negative divergence on the CROX chart, too.
    And a new bearish engulfing pattern on IBP.
    The hope will be fulfilled when these suckers genuinely start circling the drain!
    Keep an eye…
    Alan

  3. M T says:

    Can’t wait Alan. Put on a new IBP combo this AM, filled on open. Trying to catch that last heli off the roof.

    Also experimenting with some deep OTM puts on anything relatively low IV, curious how these handle during IV expansions…provided we get one of course 😉

    All the best.

    MT

  4. Alan B. Harvard says:

    bs’d
    It’s Nam, MT. Every day in this trading jungle is Viet Nam.
    As for the low vol OTM PUTs — there’s no greater bang for the buck.
    Just getting the timing right, is all.
    Best of luck!
    Alan

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