4/25/2021 Plan:
This week we look at Hartford Financial Service Group Inc – (Ticker: HIG).
4/25/2021 Plan (continued):
- HIG – Sell May 21 63.5/61 for 0.32 (other options in the commentary)
- JWN – sell the May 14th 30 put for 0.25+ or May 21 30 put for 0.30
- DIS – sell May 7 175/172.5 put spread for 0.33
- Prices are as of market close 4/23/2021, 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
4/25/2021 Commentary:
Chubb (Ticker: CB) made an unsolicited buyout proposal on HIG for $65 back in March and HIG has remained above that point since. While the buyout was rejected, the offer give us some support at that level – we look to sell spreads below it.
Depending on how aggressive you want to be, you can sell the 65 strike – say 65/62.5 for 0.47. The 63.5/61 provides a decent return and also gives us some time to get out if for some reason HIG does breach the 65 strike. a bit of a floor under this name.
The JWN 30 put is something we’ve sold in the past and we look to do it again – as with any put spreads, be prepared to take shares (trade it cash secured) or spread it. The bid/ask is wide on this name, so be sure to use a limit order. We may need a dip in JWN to hit our levels
The DIS put spread is a simple implied volatility play – with DIS not moving much, but the options are priced for a larger move. Earnings are on the 13th of May, so we will not push this to the following week if we don’t get filled.
Please remember to size your trades and the number of positions based on your account size. While we have had a ridiculously good winning percentage, a bad week or two can wipe out a lot of profits if you are over-leveraged.
Feel free to Reach out with questions on this or anything else!
4/26/2021 Entry:
HIG trade is not currently there, still working. I may sell a 65 put to take shares. Use limit orders if you do place a trade to make sure you are filled at an acceptable level.
Sold May 21 JWN 30 put for 0.26. Low premium, Pass if you don’t want shares. This is towards the bottom of our risk/reward range.
Sold DIS May 7 177.5/175 for 0.34. Moved the strikes up given the move up in DIS.
5/2/2021 Update:
JWN puts have moved a bit against us – no management required at this point and we’ll let time ideally take some of the juice out of this option.
The DIS put spreads have decayed nicely, worth only 0.12/spread at this point. They expire This week – close when you can.
5/9/2021 Update/Partial Close:
The DIS put spreads expired worthless, bringing in $34 per spread sold for a nice return on our risk of 15.7% in only 2 weeks.
The JWN puts are now in profit by $9. With the underlying at almost $40, no management is planned for this week.
5/15/2021 Update:
The JWN put expires this week. With the underlying at 41 and our strike of 30 – we’re at very low risk of assignment. No action likely required on this one.
5/15/2021 Close:
The JWN put expired, adding $26 of profit per put sold. Enjoy the win!
Feel free to Reach out with questions on this or anything else!
