3/14/2021 Plan:
A few trade ideas this week, including a put spread in Johnson and Johnson (Ticker: JNJ)
3/14/2021 Plan (continued):
- JNJ – Sell Apr 16 150/145 put spread for 0.45+
- PFE – Sell Apr 9 33.5 puts for 0.40+
- TME – Sell April 16 30/33 call spreads for 0.41
- Prices are as of market close 3/12/2021, actual fill and strikes may differ depending on Monday’s open, post will be updated accordingly.
- All trades are for educational purposes and do not constitute advice
3/14/2021 Commentary:
We return to Johnson and Johnson and look to sell some premium at the 150 strike. Implied volatility remains well above realized. This is Not a ton of premium for the width of the spread, so we won’t accept less than 0.45. It is a high probability trade though with a nice setup.
For the Pfizer puts, this is simply looking to go long shares below 34. This put has a wide bid/ask and we’ll be pretty flexible with the premium and duration, although I won’t go much below $35 for premium.
TME is Tencent Music. This is a bearish trade that assumes TME won’t go above 30 over the next several weeks. With the overall market bullish, this is a riskier trade. So – keep your position size small or simply pass on this trade if you aren’t comfortable with it. I’m adding it to balance out the large number of bullish trades in my own portfolio. If it is a complete loser, the rest of my portfolio is probably doing well and I’m ok with it. It is, essentially, a hedge and one should be comfortable losing on their hedges.
Reach out with any questions on this or any other trade!
3/15/2021 Entry:
Sold JNJ Apr 16 150/145 put spreads for 0.45. Sold TME Apr 16 30/33 call spreads for 0.34. The latter is a small portfolio hedge. Size accordingly. The PFE puts were not available. Keep an eye on them if the market turns down.
3/21/2021 Update:
The JNJ put spreads are in good shape, worth about 0.30 after the first week. No action planned for this week.
Our TME hedge is down money (expected with a hedge if the rest of the portfolio is performing well). I’m leaving it on and as mentioned, this should be a smaller size that you are ok losing with and for many members with smaller accounts – ok to skip entirely.
3/28/2021 Update:
The JNJ put spreads are doing well, worth about 0.08 per spread and a candidate to simply close for the win. They are pretty far out of the money, but it will take 3 weeks to gain just 0.08/spread.
TME crashed pretty hard this week and this hedge is now profitable. It can be taken off to capture half the credit – personally I’ll leave it on for at least this week.
4/4/2021 Update, partial close:
I closed the TME call spreads for 0.05 having captured most of the hedge. We still have 2 weeks, but that’s a long time to wait for just 0.05. They can be closed for 0.03 if you still have yours on.
The JNJ put spreads are far out of the money and worth only 0.05 or so. Feel free to take those off as well any time this week for a nice win. I’ll probably do it Monday rather than waiting a couple weeks to try and pick up a nickel.
4/10/2021 Close:
The JNJ short put spread remains comfortably out of the money. As discussed during last week’s update, I closed mine out on Monday. Specifically, I closed Just the short puts for 0.03 and left the long puts alone as some Really low probability lottery tickets. They were essentially no bid when I took of the short puts. They are now worth 0.01 and can be taken off or held in case there is a huge move down this week. This was another great profitable trade for our members! We returned a little over 9% in 3 weeks. If you decided to leave the trade on this past week, do remember that it expires this Friday, Apr 16.
Reach out with any questions on this or any other trade!
