7/11/2021 Plan:
This week we return to Disney (Ticker: DIS)
7/11/2021 Plan (continued):
- DIS – Sell the Aug 6th 167.5/165 put spreads for 0.32
- JMIA – Sell the Jul 30th 22 put for 0.50 (Higher Risk, be willing to take shares) OR
- JMIA – Sell the Jul 30th 22/20 put spread for 0.27
- Prices are as of market close 7/9/2021, 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
7/11/2021 Commentary:
The implied volatility in Disney remains high and we look to sell more options in the name to take advantage of it. If you still have DIS positions on, consider closing them before taking this on and/or size accordingly.
With JMIA, I plan to sell the puts cash secured as I’ll take shares. The spread offers a nice risk/reward and also limits your risk to only $173/spread. This name can move, so no harm in passing on this trade if you want to limit your risk.
Feel free to Reach out with questions on this or anything else!
7/12/2021 Entry:
Sold JMIA Jul 30 22/20 put spreads for 0.27.
Disney was up over $4 and the put spreads were not available.
7/17/2021 Update:
Not a great week for JMIA nor our put spreads. They are now worth 0.68/spread. Just like with the MARA trade, the same guidance applies. We can close it now for a loss, keep it on and monitor it, or roll it. My plan is to keep it on as is for the week, but if JMIA touches $22, I will consider rolling (and alert accordingly).
7/25/2021 Update:
JMIA didn’t bounce like MARA did last week and ended right near our 22 short strike, closing at 22.09. The put spreads expire this week and are worth 0.62, for a current loss of $35/spread. As mentioned in the original commentary, this is a higher volatility name and I know some of our more risk averse members passed on the idea. For those that do have it, we will need to take action this week unless JMIA really takes off. We can close at any time and take a small loss, we can roll a week for a small credit (currently 0.11) with the idea that JMIA may bounce back. We can also wait and re-assess. With the stock right at the 22 level, we will see the short 22 put decay quite a bit. Another approach is to actually let the puts get assigned (if it ends below 22 on Friday) and then sell calls against the shares. You can also do a combination of these – take some of the spreads off at a small loss to reduce your risk and then accept some of the shares. As mentioned in the original commentary, I was planning to just sell the puts cash secured and take shares, so I plan to do the same this week if the spreads don’t expire worthless. Depending on the pricing Friday, I would consider rolling the spread If JMIA is still really close to 22. If JMIA really sells off and ends below 20, I’ll just take the loss.
7/25/2021 Close:
Plenty of opportunities to close JMIA at either a small loss, break even, or for a small win. Text alerts went out when the trade was a small loser (0.10) and break even. Based on the closing price of 21.86 it would have been a 0.13 winner. For record keeping purposes, we’ll average the two alerts and consider it a 0.05 loss.
