9/26/2021 Plan:
This week we look at Chewy (Ticker: CHWY)
9/26/2021 Plan (continued):
- CHWY- Sell the Oct 8th 65/60 put spread for 0.49 OR
- CHWY – Sell the Oct 15 65/60 put spread for 0.70
- Prices are as of market close 9/24/2021, 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
9/27/2021 Commentary:
The trade idea went out via email on 9/26. With my travel schedule (an entertaining sprint from one end of ATL to the other), I was unable to provide this commentary until tonight. This shorter term trade assumes that CHWY will maintain its levels above 65. With the stock not going below 64 in may, this seems like a reasonable level to sell a put spread. Our IV remains a bit elevated compared to realized and we had a nice buffer before our short strike.
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9/27/2021 Entry:
Sold the CHWY Oct 8 65/60 for 0.49. I also sold some Oct 15 65/60 for 0.74 to follow along with those that selected that.
10/2/2021 Update:
The CHWY put spreads are worth 0.58 at the midpoint, putting us down $9/spread. They expire this week and with CHWY above $67, I intend to hold for a few days and try and close a profitable trade. As we get closer to the end of the week, I’ll look at rolling the trade if it is between 64 and 65, otherwise I made simply close and take a loss (if it drops below 64).
10/10/2021 Close:
There were opportunities to close for a small loss last week. I waited until Friday (work conflicts) and closed it for a loss for $2.53/spread. Personally, I re-opened There were opportunities to close the CHWY position for a small loss last week. I waited until Friday (work conflicts) and closed it for a loss of $2.53/spread. Personally, I re-opened short puts a couple weeks out for a credit and lower strike (specifically, Oct 22, 64 puts for 2.97, bringing in $44/put in additional credit. If CHWY drops below $60, I’ll take the loss and move on, otherwise I’ll have an overall profit in this trade if CHWY ends above $64. The loss described above closes out the membership position and if people are curious on how I manage the short puts, feel free to reach out and I’ll provide updates.
