1/17/2021 Plan:
This week we look at a few ideas, including a put sale (or put spread) in Delta Airlines (Ticker: DAL):
1/17/2021 Plan (continued):
- DAL- Sell February 19th 34 put for 0.39 OR
- DAL- Sell February 19th 35 put for 0.55 OR
- DAL- Sell February 19th 35/33 put spread for 0.26
- OSTK – Feb 19 45/40 put spread for 0.50 – 0.85 – Speculative
- MSFT – Sell January 29 197.5 put for 1.15 Earnings premium – only if you want shares
- Prices are as of market close 1/15/2021, actual fill and strikes may differ depending on Tuesday’s open, post will be updated accordingly.
- All trades are for educational purposes and do not constitute advice
1/17/2021 Commentary:
Delta Airlines just announced earnings last week and sold off. With no earnings on the horizon, yet implied volatility still Well above realized, we look to sell some puts assuming it won’t sell off another $5-$6. Selling puts in airlines is a bit more speculative and assumes that we’ll continue the long slow grind back to normalcy. I would Much rather sell puts in Delta or Southwest that are stronger overall compared to some of the other airlines. If you simply want to trade the name – use the spread.
A speculative trade for this week is the Overstock (Ticker: OSTK) 45/40 put spread for 0.85 at the mid point. I don’t expect to fill at this value and will take all the way down to about 0.50.
We are heading into earnings (again) – if you are looking to add long term positions in different names, you can sell puts at an increased volatility level. With earnings, we shouldn’t be surprised to see a big move, so only sell puts in names you are willing to own around earnings.
MSFT Jan 29 197.5 put for 1.15 (at the midpoint) came up with our analysis tools as an ideal strike to sell in the 12-15% annualized return range – actually it returns about 16.3% – This includes earnings.
Did you sell some of those Intel Puts from last week? Huge move in the name with the announcement of the CEO change. Hope you’ve followed some of our bullish INTC recommendations in the past!
Reach out with any questions on this or any other trade!
1/19/2021 Entry:
Sold the Feb 19 45/40 put spread in OSTK for 0.80. DAL Feb 19 35 puts were sold for 0.40. Received less than desired on the DAL puts, so no harm in passing if shares aren’t of interest to you.
1/24/2021 Update:
The DAL puts are down about $5, but remain $5 OTM, no change planned for this one.
The OSTK put spreads are doing quite nicely, down to 0.44. Feel free to take them off if you need the capital or to reduce risk. I’ll be leaving them on this week pending any major move towards the short strike.
1/31/2021 Update:
With the market selling off the DAL puts are nearer to the money than last week. Keep an eye on them and be willing to close for a small loss if the market continues to fall. I personally will hold and take the shares. The OSTK put spreads are now over $30 OTM and no action will be taken this week unless we can get an easy close for a few cents. They are quite profitable and can be taken off if you need to free up capital or simply want to book the win.
2/7/2021 Update:
The DAL puts are now worth only 0.09. With expiration a little under 2 weeks away, you can take them off now and reallocate capital or leave them on to squeeze a bit more premium. If you have other opportunities, I would simply close it and move on.
The OSTK put spreads are about $47 out of the money and incredibly low risk at this point. If you can close for a penny or two go for it. At 0.80/spread, these were nicely profitable
2/14/2021 Update:
The OSTK put spreads are now over $60 OTM. Can close at any time this week or (likely) let them expire worthless
The DAL put is also almost worthless at only 0.03. Close at your convenience.
Remember these both expire this week, if they go anywhere near the short strikes close them out.
2/21/2021 Update/Close:
The OSTK put spreads and DAL puts expired worthless, pulling in more profit for our members – $80 per put spread and $40 for the put. Assuming 2 put spreads, that’s another $200 in profit, covering a half year’s subscription!
Reach out with any questions on this or any other trade!
