2/27/2022 Plan:
This week we look at Match Group (Ticker: MTCH)
2/27/2022 Plan (continued):
- MTCH – Sell Mar 18 100/95 put spread for 0.60
- MDT – Sell Apr 15 97.5 put for 1.44 OR
- MDT – Sell Apr 14 97.5/95 put spread for 0.43
- Prices are as of market close 2/25/2022, 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
2/27/2022 Commentary:
Never actually used their products, but MTCH has many of the dating apps including Tinder. This trade assumes that the recent bottom of 100.6 holds. A volatile name, this is a riskier trade (it was trading briefly at 182 towards the end of 2021).
I am looking to add shares of MDT below 100 and this longer term put sale allows me to get it in at an equivalent of 96.06. If you don’t want shares, this put spread is pretty attractive – longer term, but note that is 0.43 on a 2.5 dollar spread.
Feel free to Reach out with questions on this or anything else!
2/28/2022 Entry:
Sold MTCH Mar 18 99/95 put spreads for 0.50. Note narrower spread. I sold the MDT April 14 97.5 put for 1.76. Can get almost 0.47 for the 97.5/92.5 spread.
3/6/2022 Update:
MTCH took a big hit Friday and we’re down on these spreads. We still have two weeks and if the market recovers, this position will too. Another approach is to simply close and take the loss – let your account size dictate what is best. If you can’t take a full loss on any spread position, you need to reduce your trade size.
The MDT puts (or put spreads) are doing quite well. The put is down to 1.29 and therefore profitable by $47. I’m holding to try and capture more decay.
3/13/2022 Update:
The MDT puts remain profitable. No planned action this week – we have quite a bit of time left.
MTCH has had some Crazy moves in the last week and unfortunately it is on the lower end of its range as we go into expiration week. You can close any time and take the loss or hold on and see if we get another bounce. I’m doing the latter, but am prepared to take a full loss on the position. I may even take shares on 1 of the 2 put spreads to sell calls against it as I like MTCH longer term and expect it to bounce back (eventually)
3/20/2022 Update/Partial Close:
The MDT puts remain quite profitable – take them off if you need to free up margin, otherwise hold longer to try and capture more decay. I’m doing the latter.
Last week I discussed being prepared to take the full loss on the MTCH put spreads – a $7 move on Friday resulted in the put spreads expiring worthless! We add $50 of profit in our accounts for each put spread sold. On Friday, when MTCH was trading between our strikes earlier in the day, I actually Sold the long leg on half the position. This left me with a short put to go with one of the put spreads as I was prepared to take shares (mentioned this last week). This allowed me to capture a few more $ – but I needed to be willing to take 100 shares, even if MTCH sold off quite a bit more. This is not included in the results we track, but wanted to share the concept as it can add a few $ to someone’s bottom line in a given year if they understand the additional risks with doing so. Reach out if you want to understand more about this concept.
3/26/2022 Update:
The MDT put is down to $27 at the midpoint, meaning if we close there we would capture $149 of profit. We still have a few weeks left and I’ll plan to ride it out and try and capture all of that premium.
4/3/2022 Update:
The MDT put is not worth very much with 2 weeks to go. You can leave it and try to let it expire worthless (I’m leaning towards that), close it to book a profit (no harm there) or do something pretty creative to add some downside protection. Specifically, one could buy a Higher put, like the 107 put for about 0.30. We would then be Long a 107/97.5 put spread. We would be guaranteed $146 of profit and could actually gain another $950 of profit if MDT tanks in the next two weeks and ends up below 97.5 by expiration on April 14th. It gives our portfolios a little extra downside protection. With the market still selling off late last week, this isn’t a terrible play, but note that we are giving up $30 of the initial $176 credit to do so.
4/9/2022 Update:
I didn’t get around to closing the MDT put. It expires this Thursday (market closed on Friday) and I intend to let it expire worthless. If the market has other plans, I’ll look to roll or take shares. I may also simply close it out on Monday if I have time.
4/17/2022 Close:
The MDT put expired worthless on Thursday, adding a very nice $176 of profit for each put sold. This was a solid winner and while I would have taken shares at the 97.5 level, I’m also quite content to pocket the full premium sold.
