7/5/2021 Plan:
This week we look at Palantir (Ticker: PLTR)
7/5/2021 Plan (continued):
- PLTR – Sell the Aug 6th 21/19 put spreads for 0.22
- MARA – Sell the Jul 30th 22.5 put for 0.55 (HIGH RISK)
- MARA – Sell the Jul 30th 22.5/20 put spread for 0.28 (Still high risk, but risk defined)
- Prices are as of market close 7/2/2021, 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
7/5/2021 Commentary:
With the market at all time highs, we look to put on a bit less risk this week. Remember, it is ok to take a week off or pass on trades if you want. Personally I am making fewer trades this week overall and am adding to some long term holdings (where I buy a fixed amount every month or so).
We look at a pretty far out of the money put spread in Palantir. I’ve traded around this name in the past and the Implied volatility is pretty high with the recent down turn in the stock. If it opens up down further tomorrow, I may adjust the strikes accordingly. If you want a higher risk put sale (or put spread) take a look at MARA which will be pretty correlated with the price of Bitcoin. Keep your position size reasonable and be willing to take a larger than normal loss when trading higher volatility names. In return, we get over 2% for just a few weeks if it expires worthless.
Feel free to Reach out with questions on this or anything else!
7/6/2021 Entry:
PLTR not available. Could sell 21.5/19.5 Aug 6 for 0.20. One could also go another week, but that would include earnings. Sold MARA Jul 30 22 put for 0.51. Could spread 22.5/20 for 0.31. Will track both. Note one would generally place one or the other.
7/11/2021 Update:
The MARA position – whether the spread or the put sale – is flat from when we put it on. I am not planning any change to the trade this week and will leave the position as is. We have a few weeks before expiration and we are still about $5 from the short strike.
As discussed, before the trade, this is a Volatile name and can move a lot. I know some passed on this trade to keep the volatility down in their account, which is great – all trades are for educational purposes only and simply watching how more volatile names move is of benefit.
7/17/2021 Update:
The MARA position is down after a sell off this past week. The put spread is worth 0.83 and the short put is near 1.15. MARA closed Friday at 23.33 – we have 1.33 before it hits our short put and 0.83 before it hits the short leg of our spread. There are a few options for how to handle this trade. With numerous winners closing last week, we can simply close it take the loss and still be up overall on our trades. The expiration is still about 2 weeks away. A second approach is to simply leave it on as MARA remains above our short strikes and we will benefit from theta if it doesn’t drop much further. Another approach is to roll the trade to a further expiration and/or lower strikes. For example, the short 22 put could be rolled another week and down to the 21 strike And receive a 0.02 credit. Personally, I am leaving the trade as is and will monitor it. If we continue to sell off as we get closer to expiration, I may roll it and will alert accordingly. As a reminder, I have the put sale as the silver trade and we will continue to monitor both trades for educational purposes.
7/25/2021 Update:
The short MARA put is worth 0.37 at the mid point, which makes it a $14 winner so far. MARA rebounded nicely last week giving us some more space between our short put (or put spread if you have that on). The put spread is down a little going into expiration week. MARA can still move quite a bit each day, so watch this one a little more closely and take it off when you are happy with the profit or want to take the risk off your account. Specific for the put, I plan to leave it on until Thursday or Friday and will try to close it for a few cents. I will also roll it out another week if it is challenged. If you have the put spread on, take a look at last week’s notes on how to manage it. I would personally leave it on until Thursday or Friday if MARA stays above 23 to try and collect more decay and then close it cheaply. If MARA went below 23 during the week, I’d probably just close it for a small loss.
8/1/2021 Close:
MARA recovered nicely this past week and the puts (or put spreads if you chose) expired worthless. This brought in $51 profit per put sold or $31 per put spread sold.
