8/7/2021 Plan:
This week we look at Match Group (Ticker: MTCH)
8/7/2021 Plan (continued):
- MTCH – Sell the Sept 17th 130/125 put spread for 0.79
- RKT – Sell Aug 27th 15 put for 0.28
- Prices are as of market close 8/6/2021, 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
8/7/2021 Commentary:
Match Group (Ticker: MTCH) missed earnings last week with 46 cents of earnings compared to a consensus estimate of 51 cents per share. Quarterly sales actually beat estimates. The trade this week assumes that MTCH doesn’t go below its lows in March of 129.68. If there is a continuation of the sell-off on Monday, I may look for an even lower spread.
We look to sell a put in RKT below where it has ever traded and take in almost 2 percent in just a few weeks. I would only recommend selling puts cash secured with a willingness to take on the shares long term. One could also buy a lower put turning this into a put spread.
Feel free to Reach out with questions on this or anything else!
8/9/2021 Entry:
Sold MTCH sept 17 125/120 for 0.46. Original strikes available for more premium – about 0.75 if you prefer that risk reward. With MTCH selling off a bit more this AM I went with lower strikes. Sold RKT Aug 27 15 put for 0.24.
8/14/2021 Update:
MTCH continued its decline this week – not good for our position – and our put spreads are now worth almost $1. A few choices. We can close and take the loss. We can wait and see for another week as we still have about 1 month left in the trade. We can roll further out to bring in more premium (and add more time to the trade). I like this last option the least. For those with smaller accounts or have accidentally put on too much size (you know who you are…), taking the position off or at least reducing size is fine. I prefer to simply wait another week. We are still $11.25 above our short strike and the trade has time to play out. There is a lot of support at the 130 level. The only thing that may change my mind this week is if MTCH closes below that meaningfully, we may want to pull the cord and exit the trade.
With RKT blasting off (hard not to use Rocket puns here, email with complaints…), our short 15 puts are only worth 0.05. For those without portfolio margin, feel free to close this take the win and free up margin. I’m keeping it on as it has a low risk of being assigned and minimal margin impact.
8/21/2021 Update:
The RKT puts are down to 0.02 at the midpoint and expire this week. Close them when you can or leave them open to pick up $2. How do you decide? Let’s pretend RKT plummets this week to $14 and you have to buy the shares – are you willing to pay $2 to avoid that? If so, close. If you’re happy with the shares, leave it open. I’ll put in an order to close and clear the risk off my book.
As discussed, MTCH has a lot of support at the 130 level and it spent the week essentially bouncing off of it, which is nice. We still have a lot of time on this position and I’m keeping it open (You can always take a partial loss now to reduce risk). It is still down, but less than last week (also nice). Just like last week, if we see a close below 130, I may close.
8/28/2021 Update/Partial Close:
The RKT puts worthless this week, bringing in a full $24 per put sold. This isn’t crazy, life changing money, but these wins add up!
The MTCH put spreads have improved this past week and are now worth 0.26 at the midpoint, giving us $20 of profit per spread if we choose to close. I’m keeping it open for now, with the plan to capture more of the premium.
9/4/2021 Update:
The MTCH put spreads are now down to 0.08, giving us a $38 profit per spread if we were to close now. These still have two weeks left to gather ~$4/week. You can close if you are light on cash for other trades to book the win or leave it on to slowly try and get the rest. I’m doing the latter.
9/11/2021 Update:
The MTCH put spreads are pretty much worthless and should expire easily this week. Certainly one can close at any time to book the win or even buy a cheap hedge at a higher strike. I may put in a small offer to buy the short leg for a penny or two to just clear the risk.
9/19/2021 Close:
The MTCH put spreads expired worthless bringing in an additional $46 per spread sold. Another nice win for those that took this trade.
