7/25/2021 Plan:
This week we look at Axon Enterprises (Ticker: AXON)
7/25/2021 Plan (continued):
- AXON – Sell the Aug 20th 155/150 put spreads for 0.50
- GM – Sell Jul 30th 53 put for 0.30*
- NFLX – Aug 20 480/475 put spread for 0.52
- Prices are as of market close 7/23/2021, 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
7/25/2021 Commentary:
The short put in the AXON put spread is $28 out of the money, But it includes earnings and AXON can certainly move -it has had a large trading range. I tend to use smaller size when earnings is involved, you may wish to do the same. This is a higher risk trade, so if you want to pass, check out the other couple of trade ideas for the week. The NFLX put spread is a bit more straightforward and as NFLX recently announced earnings, there isn’t a known event between now and expiration. Feel free to pick one or both.
The GM put is a way to get shares at a lower price and get paid to do so. Earnings is on the 4th, so if we’re assigned on the put this week, we’ll have some added risk going into next week – please keep that in mind before placing this trade.
*Only sell puts if you are ok holding shares for the longer term, otherwise consider a put spread.
Feel free to Reach out with questions on this or anything else!
7/26/2021 Entry:
Sold AXON 8/20 155/150 put spread for 0.50. Sold NFLX 8/20 480/475 put spread for 0.48. GM was not available.
7/26/2021 Update:
The AXON put spreads are now worth 0.40, meaning we could close now for a $10 win. There were some better prices last week and I sold at least one put spread for 0.55 – we’ll use the alert price of 0.50 for tracking, of course. No planned change for this week on this trade.
The NFLX put spreads are down to 0.32 after the first week, meaning we could close and capture 1/3 of the profit after the first week. No planned change for this week on this trade and I’ll look to capture more decay.
8/7/2021 Update:
The NFLX put spreads can be closed now for 0.15 and a $33 win per spread. As they are about $40 out of the money, I intend to leave them on for at least this week. If they really plummet to ~0.04 or 0.05 I may close.
With AXON earnings now past us, the implied volatility dropped in the name and the puts now far out of the money are nearly worthless (wide bid ask spreads, but the short put could be closed cheaply. One could even buy a put – say the Aug 20 165 for 0.25 to turn this into a Long position making a downside hedge And be guaranteed a $25 win! I’ll personally just leave the position alone for this week unless I can close the short put for 0.05.
8/14/2021 Update:
The NFLX put spreads are down to 0.05 and expire this week. With NFLX at 515 and the short leg at 480, these are very likely to expire worthless. You can close them for 0.05 at any point or try to capture the last nickel this week. Just be sure to close them if NFLX starts to go down and prevent turning a nice win into a loser.
No real change on AXON this week, with the puts very far out of the money. If you didn’t close them cheap, let them (likely) expire worthless this week.
8/21/2021 Close:
The AXON put spreads and the NFLX put spreads both expired worthless, with very little risk of them losing last week. That’s $50/spread in AXON and $48/spreads in NFLX – two nice winners!
