4/10/2022 Plan:
This week we try again with Chewy (Ticker: CHWY) and also look at Lowes (Ticker: LOW) in case CHWY doesn’t work out…
4/10/2022 Plan (continued):
- CHWY – Sell May 6 35/30 put spreads for 0.46 OR
- CHWY – Sell May 13 35/30 put spreads for 0.53
- LOW – Sell May 6 190/185 put spread for 0.59
- Prices are as of market close 4/8/2022, 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
4/10/2022 Commentary:
We look at CHWY this week. Just like last week. But with later expirations as CHWY popped off last Monday before selling off later in the week some.
I like either of the put spreads. You get a little more for the latter put spread, of course, but need to hold for another week. Take a look at your portfolio as well – if you have a lot of positions already on either date, consider choosing the other.
I’ll try to avoid starting any controversy over which is better – Home Depot or Lowes. Right now, I like a Trade in LOW over the next several weeks. This put spread assumes LOW stays above 190 between now and May 6. LOW has rebounded some recently and this gives us some buffer beyond the recent low as well.
Feel free to Reach out with questions on this or anything else!
4/11/2022 Entry:
Sold CHWY 5/6/2022 35/30 put spreads for 0.46. Sold LOW May 6 190/185 put spreads for 0.65
4/17/2022 Update:
We are down a little on the CHWY put spreads after a $3 selloff on Thursday. Still have a few weeks and almost $5 to go before it hits our short strike. I’m maintaining the position as is.
At the midpoint, the LOW put spreads are worth 0.54 and therefore currently profitable by 0.11. I’m planning to hold these with no change through the week. They have 3 weeks to go and over $10 buffer from the short strike.
4/23/2022 Update:
CHWY dipped below the 35 strike this week as the market and CHWY went down. Folks can cut the loss here if they’d prefer. I’d like to see if the market stabilizes a bit this week and/or recovers. I’m holding. As a reminder, I size my positions assuming the “max loss” on any trade.
We have a couple more weeks to go on the LOW put spreads and I plan to keep holding.
4/30/2022 Update:
CHWY dropped quite a bit last week and for those that cut their losses last week, they are feeling pretty great about the decision! For those that didn’t, we may take the max loss on the position. It expires this week.
LOW put spreads are holding up and also expire this week. LOW is about $8 out of the money and if that holds, it will help offset a bit of the CHWY loss.
5/7/2022 Close:
CHWY had a nice pop mid week before getting crushed. Some traders got out of their spreads for a smaller loss, but the official score is a full loss of $908, our biggest one this year. Unfortunately not all trades can be winners and we’ll take a big loss from time to time.
The LOW put spreads did expire worthless and the $130 of profit helps to offset a bit of the CHWY loss.
