12/5/2021 Plan:
This week we look at Medtronic (Ticker: MDT)
12/5/2021 Plan (continued):
- MDT- Sell the Jan 21 95/90 put spreads for 0.50
- RKT – Sell the Dec 31 13.5 puts for 0.25
- Prices are as of market close 12/4/2021, 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
12/5/2021 Commentary:
With the market selling off, we will move away from more speculative names for put spreads and towards more ‘blue chip’ type names. Medtronic has been increasing their dividend each year, has a history of earnings. This is a name one could hold longer term and probably do just fine. The increase in vol and recent sell off in the name allows us to place a longer term put spread about $12 below its current value.
The RKT put is pretty far out of the money and the name has not spent any meaningful time below $15. Remember to size assuming you Will be assigned when selling puts to avoid over leveraging yourself.
Feel free to Reach out with questions on this or anything else!
12/6/2021 Entry:
Sold Jan MDT 100/95 put spreads for 0.51. Sold RKT Dec 31 14 puts for 0.20
12/12/2021 Update:
The MDT put spreads are down to 0.26, meaning we could close and collect almost half of the premium in one week – a very good outcome. We still have many weeks (~6) before this trade closes and if you need to free up capital or you are looking to close some winners to offset losses from a tax perspective, this is a fine one to choose. I’ll personally be leaving it on for the near term – just realize the spread will maintain reasonable value for a while.
The RKT puts are down to 0.11 – also down by almost half, which is great. This trade only has about three weeks left and I’ll be leaving it on for at least this week.
12/19/2021 Update:
MDT has sold off and we are down on the position. We are still above the short strike and have a Lot of time and I’ll hold at least this week and will evaluate next week. Note that the company received a warning letter from the FDA, which is what caused the huge drop mid last week. We’ll need to watch this one as it has (recently) been a catalyst for the downside move.
The RKT puts are mostly flat since last week – now worth 0.13 at the mid point. I plan to hold through expiration next Friday (Dec 31)
12/24/2021 Update:
MDT recovered some this week, helping our position. We’ll continue to hold as we still have quite some time on the position.
The RKT puts decayed well and can be closed for 0.05. Feel free to book the win Monday. I’ll likely hold through expiration as I’m fine taking on shares.
1/2/2022 Update/Partial Close:
The MDT puts are effectively flat (tiny profit of $1/spread). No planned change here, but keep an eye on these. As we are now fairly close the short strike, this will be a volatile position – if you would like to close for a wash and reduce volatility, feel free to do so. Alternatively if you are trading too many spreads for your account size (you know who you are…), consider taking off some of the position to reduce the volatility in your account balance.
The RKT puts -probably- expired worthless, unless you were unlucky and assigned. If that is the case, simply close Monday for the win, or sell calls against it (wheel trade). Personally, I rolled at bout 3:30PM 2 weeks out, buying it back for 0.02 and selling the Jan 14 13.5 put for 0.28 – a net credit of $26.
1/8/2022 Update:
The MDT put spreads are down to 0.29 with two weeks to go. No planned change for this week. The market has been a bit volatile, though, so as mentioned last week, if you need to lighten up exposure, this can be closed for a win.
1/16/2022 Update:
The MDT put spreads are down to 0.05 and can be closed at any time. With about $8 between the current price and our short strike, these are fairly safe, but no harm in closing earlier in the week to reduce risk and book the win. I’ll close as time permits.
1/22/2022 Close:
The MDT put spreads expired worthless, which adds $51 of profit to our accounts – all profit is great, but these wins really help given the market’s recent downturn.
