4/19/2020 Plan: As strange as it seems, volatility has actually dropped over the last few weeks as we’ve had a nice multi-week move higher. Note, however, that volatility remains high on an absolute basis, with the VIX closing at 38.15 on Friday April 17th. This week, we look to sell a put spread in a Walgreens Boots Alliance near its recent lows, with the thought that demand for anything related to healthcare will keep the name propped up a bit.
4/19/2020 Plan (continued):
- WBA – sell 2 of the the 15 May 40/37.5 put spreads for 0.62 at the midpoint. You can look at the 37.5/35 to increase the probability of expiring worthless at the trade-off of less premium.
- Prices are as of market close 4/17/2020, actual fill and strikes may differ depending on Monday open, post will be updated accordingly. Spreads are wide and less than the midpoint is expected.
- All trades are for educational purposes and do not constitute advice
4/21/2020 Entry: Missed opening this trade on Monday, opened on Tuesday with slightly different strikes, specifically
- 8 May 39.5/38 put spreads for 0.30 x3
5/1/2020 Update: The position remains profitable despite a drop in the market on Thursday and Friday. No harm in taking the profit if you think the market will continue to drop over the next week. No one ever went broke taking a profit.
5/8/2020 Exit: The position expired worthless, bringing in the full credit. $30 per spread on $120 of risk, which is a nice 25% return on risk for a few weeks. $90 profit for the 3 spreads for sample account sizing.
