5/16/2021 Plan:
This week we return to Axon Enterprise (Ticker: AXON)
5/16/2021 Plan (continued):
- AXON – Sell June 18th 115/110 put spreads for 0.70
- DIS – Sell the Jun 11 165 put for 1.58
- LOW – Sell the Jun 17 180 put for 2.02*
- Prices are as of market close 5/14/2021, 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
5/16/2021 Commentary:
You may not know the name Axon Enterprise, but you almost certainly have heard of one of their main products the TASER. They have also expanded into body cameras and software to store “digital evidence”. This week’s trade looks to take advantage of a recent downturn in the stock and sell options below its 6 month low. The spreads are pretty wide based on the weekend quotes (actually shows 0.85 for the 115/110 spread), so we’ll be flexible with our entry. I would consider going as high as the 120/115 strikes.
A couple put sale ideas this week. The first is a simply play to take ownership of Disney stock at lower prices (currently trading a bit below 174). This requires $16,500 in cash to take the shares if assigned. The Lowes put includes earnings and is therefore a higher volatility play. This requires $18,000 in cash to take the shares. Both of these are for higher value accounts and won’t be tracked as part of the site’s results as many members may be priced out. If you would like to put them on as a trade, you can buy a lower strike put to turn them into put spreads.
Feel free to Reach out with questions on this or anything else!
5/17/2021 Entry:
Sold the Jun 18 115/110 put spreads in AXON for 0.59. Had entered at 0.55 and got some price improvement.
5/23/2021 Update:
A volatile week for AXON and our put spreads are down a bit. Still about $12 out of the money and no planned change to the position for this week. If it breaks meaningfully below 120, I may take the loss to prevent a bigger one. But for now, we’ll sit and wait and look for more decay.
I sold the DIS 162.5/157.5 put spreads for 0.69 expiring on Jun 4, they can be closed for 0.26 for a quick profit.
The LOW puts I mentioned were sold for 2.03 (180 strike), and can be bought back for 0.43 with earnings now behind us. These trades, while both quite profitable in just a week, won’t be added to the tracker as they were noted to be for larger accounts (the LOW put requiring $18k), but for those that followed, enjoy the extra $ in your pocket!
5/31/2021 Update:
The AXON put spreads have moved well in our preferred direction, with the short leg worth only 0.15. There are still a few weeks remaining, so feel free to close out at your convenience. You can sit on them and gain about $3 to $5 per week if AXON stays at these levels.
6/6/2021 Update:
Basically the same update this week as last week! With the short puts far out of the money, the last few cents are going to take a while to decay. Take it off and book the win or keep the trade on for another 2 weeks. If you need the margin for other trades, this is an easy one to close.
6/13/2021 Update:
3rd week in a row, the update is essentially the same – AXON keeps moving up and our put spreads remain effectively worthless. I’ll probably just let them expire. Do take them off if you need the margin.
6/20/2021 Close:
The AXON put spreads expired worthless as expected, bringing in a nice $59 of profit to our account per spread sold.
Feel free to Reach out with questions on this winning trade or anything else!
