5/17/2020 Plan: Two ideas to consider this week – one bearish positions and one bullish. Pick one or the other, or both!
5/17/2020 Plan (continued):
- AAPL – 5 Jun- Sell 330/335 call spread for a 0.47 credit.
- JPM – 5 Jun – sell the 78/75 put spread for a 0.51 credit.
- Note that if JPM expires between 78 and 75, I will plan to take assignment of the shares and sell calls against it.
- The AAPL trade assumes that we won’t see all time highs in AAPL in the next 19 days. This is definitely a “fade the rally” in tech type of play.
- Prices are as of market close 5/15/2020, actual fill and strikes may differ depending on Monday open, post will be updated accordingly.
- All trades are for educational purposes and do not constitute advice
- As always, reach out with any questions!
5/18/2020 Entry – Market was a LOT today. With huge moves like this, no harm in sitting a trade out or waiting until you are more comfortable.
- Sold AAPL 29 May 330/335 call spread for 0.60. Note this is a higher credit And it is a week earlier. One could (and still can) fill the 5 Jun version for over $1. Note that 330 is now within the expected move of the June 5 expiration, whereas the 29 May is just outside (as of market close)
- Did not trade JPM – the 78/75 is already down to 0.16. Had this been put on on Friday, would recommend taking it off for the quick profit.
- As always, reach out with any questions!
5/22/2020 Update – AAPL was up a decent amount this week yet our position is still profitable, with a $20 profit so far. Given the strong move up, taking it off and banking the profits is a fine move. If you want to keep it on longer and try to squeeze more profit, that is OK too. Reminder that it is a short holiday week and the markets don’t open until Tuesday.
5/27/2020 Exit – I took off the AAPL position today for 0.10. This was a $50 winner on $440 of risk for an over 11% win in just 9 days. With the market rallying over the last couple days, I wanted to avoid turning a nice winner into a huge loser. It is worth noting that we made money on a bearish position and the stock went up! This is one of the big advantages of options – theta and a decrease in implied volatility overcame the delta that worked against us. As always, reach out with any questions!
