7/26/2020 Plan: Last we we tried to sell puts (or put spreads) in Slack (Ticker: WORK). This week, we try again!
7/26/2020 Plan (continued):
- WORK – Sell 1 of the 21 August 25 puts for 0.34. You could spread with the 23 strike for 0.25.
- Prices are as of market close 7/24/2020, 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!
7/26/2020 Commentary:
With last week’s trade alert upon placing the PRU put, we discussed how Slack had risen in price and we couldn’t get favorable pricing on either an outright put sale or a put spread. Rather than force the trade, we waited. WORK then proceeded to drop the next 4 days. Had we taken the trade, we’d be down on the position. By being patient, we now can enter at either much better values or more favorable levels.
Note that one could still sell the 26 put for a 0.54 credit at the mid-point. The trade off, of course, is a higher probability of assignment. The 26/24 put spread is at about 0.32. If WORK does rebound on Monday, we may take a good price at the 26 strike.
Reach out with any questions on this or any other trade!
7/27/2020 Entry:
Sold the 21 August 25 put for 0.34 per the plan. The 26 strike is also available for about 0.55
8/2/2020 Update:
The put is worth 0.22 for a gain so far of 0.12 per put. WORK has also stopped descending with a couple of up days in a row. We’ll leave the put on to try and profit more. The 26 strike, if selected, is down to 0.38 at the midpoint, for a gain of 0.17.
8/9/2020 Update:
The 25 put is worth about 0.20. No change to the position. The 26 strike is down to about 0.34. The stock declined quite a bit on Friday, but we’re still about $4 out of the money with 2 weeks to go.
8/16/2020 Update:
The put is now worth about 0.06 and can be closed at any time this week. It is over $3 OTM, with the expected move this week about half of that. Anything can happen, though, so taking the risk off and re-allocating is a fine move. As I’m happy to add shares of WORK, I’ll leave the put on through expiration, unless I decide I need the capital elsewhere as the week progresses.
8/23/2020 Close:
WORK expired worthless allowing us to keep all the premium in the position, $34 for each put sold at the 25 level, $55 for the 25 level. This was a straightforward position and was never really challenged, making it an easy one to manage! As always Reach out with any questions on this or any other trade!
