12/13/2020 Plan:
This week, we look at a bullish play in DOW (Ticker: DOW), a possible entry level for Microsoft (Ticker: MSFT), and a VERY speculative play in BYND
12/13/2020 Plan (continued):
- DOW – Sell January 15th 47.5 put for 0.58.
- MSFT – Sell the January 8th 200 put 2.0 or 200/195 put spread for 0.67
- BYND – Sell the January 8th 120/115 put spread for 0.75
- Prices are as of market close 12/11/2020, 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
12/13/2020 Commentary:
The DOW put sale is for those willing to hold DOW longer term and is a pure play on higher IV than HV. If you aren’t interested in a longer term position in DOW, please pass on the trade.
MSFT has been holding the 200 level well and this trade looks to take advantage of it. I’ve owned MSFT for many years and am happy to add some more at this level. For a more straight forward trade, the put spread offers a nice return on capital risked of about 15% (67/433 = 15.5%)
The BYND trade is very, very, very speculative. I am actually bearish on the name long term. However the setup is pretty good and you should generally trade what the market offers. BYND dipped below 120 1x since May and that was right after earnings (when it dropped from 150+). It quickly recovered to about where it is now and really hasn’t moved. In the spirit of offering ‘interesting’ trades, I’ve included this one, but would Not put it on with a smaller account and one really needs to be prepared to take a full loss on it. But – it should be fun to watch and I’ll track it weekly.
Reach out with any questions on this or any other trade!
12/14/2020 Entry:
The DOW put can be sold for 0.53+
The MSFT put spread had to go one week further and could be sold for 0.63
The BYND trade also had to go one week further to receive an equivalent credit of 0.74
12/20/2020 Update:
The DOW put is now worth about half as much at 0.27. Holding for this week.
The MSFT put spread is profitable, worth about 0.47. Holding for this week.
The BYND put spread has also gained nicely and is only worth about 0.40. I’ll probably take profits on this one sooner rather than later, but no action is planned for this week.
All three trades are performing well as we go into a couple of holiday-shortened weeks. Please remember that the markets are closed on Friday and early on Thursday (1PM Eastern)
12/27/2020 Update:
The DOW put declined a bit in value and is down to 0.24, holding again.
The MSFT put spread is now worth only 0.16 and can be closed to book the win at your convenience. You can also likely squeeze a bit more out of it this week.
The BYND spread is still worth about 0.58 – still profitable but this volatile name will take a while to have the premium come out. You can close it to reduce volatility in your account or hold to try and capture premium. Personally, I’m doing the latter.
1/3/2021 Update:
The DOW put is down to 0.11 and can be closed at any time for a nice win.
The MSFT Put Spread is worth about 0.20 and can also be closed when you’re ready to book the win.
As predicted the BYND spread has been Very volatile and is currently a paper loss. Certainly more of a ‘gamble’ than we traditionally put on. If you put on this optional trade, keep an eye on it this week and be prepared to cut your losses.
1/10/2021 Update:
The DOW put is essentially worthless. Close or let it expire this week.
The MSFT put spread will expire this week, very likely worthless. Close it now to capture the gain or wait until later in the week.
The BYND put spread is now in the money. If you took this optional trade And didn’t close it already, please make sure to take action on it this week.
1/17/2021 Update/Close:
Everything expired worthless this week, which is nice. The DOW put sale brought in $53 to our accounts per contract sold. The MSFT put spread brought in $63/spread and the BYND an additional $74. If you only did 1 each that’s another $190 added to your account.
Reach out with any questions on this or any other trade
