5/29/2022 Plan:
This week we take a look at airbnb (Ticker: ABNB)
5/29/2022 Plan (continued):
- ABNB – Sell the Jun 24 100/95 put spread for 0.51
- AMD – Sell the Jul 8 80/75 put spread for 0.48
- Prices are as of market close 5/27/2022, actual fill and strikes may differ depending on Tuesday’s open, post will be updated accordingly.
- All trades are for educational purposes and do not constitute advice
5/29/2022 Commentary:
With a strong rebound at the end of last week, we’ll be cautious and look at some far OTM put spreads in a couple of names. If there is a reversal and big sell-off on Tuesday, then we may pump the breaks. As a reminder, the market is Closed Monday for Memorial Day.
We recently closed a winner in AMD and this trade looks to duplicate that approach (although at higher strikes). airbnb is a bit more speculative, so keep that in mind from a size and portfolio risk perspective.
Feel free to Reach out with questions on this or anything else!
5/31/2022 Entry:
Sold Jun 24 100/95 ABNB put spreads for 0.51
Sold Jul 8 80/75 AMD put spreads for 0.45
6/5/2022 Update:
The AMD put spreads are down to 0.29 with many weeks to go. With about $25 buffer between the stock price and the short strike, I intend to leave this one alone this week and let theta work its magic (note, theta is not actually magic…)
The ABNB put spreads are also doing well, worth 0.43. This is a very volatile name and it will take a bit for these to decay. Full disclosure – I just paid the second half of my upcoming ABNB vacation, so I’m doing my part to prop up this name…
6/11/2022 Update:
We are down a bit on the AMD put spreads as the market has sold off. No planned changed on these with plenty of time and good space between the current stock price and the short strike.
Down as well on the ABNB put spreads with less time to go. A continued sell-off will challenge this position, but I do intent to hold at least through this week.
6/18/2022 Update:
With ABNB down, we will need a small rally to profit on these put spreads before they expire this Friday. One can roll to buy some more time. I’m size to let them go until later in the week.
AMD sold off quite a bit and we are down on the put spreads. With a few weeks to go I’m holding as they remain out of the money and I kept my size small. A market rally will help us in the next few weeks. I would also take some shares if it ends between our short and long strike, but note that is capital intensive.
6/26/2022 Update:
We received the rally needed in ABNB and the put spreads expired worthless, bringing in a profit of $51 per put spread sold. Can’t ask for a better outcome and when the market breaks our way, we’ll take it!
We still have two weeks on the AMD put spreads and about $7 room between the current stock price and our short strike of $80. No planned change this week on this trade.
7/10/2022 Close:
The AMD put spreads went out at 0.70 for a loss of $25/spread sold. I actually missed closing them and now have 200 shares with an effective price of 79.55 (80 minus the 0.45 initial credit for the spread). Depending on the market open on Monday, I can take a few different actions – sell calls to collect more premium and try to get out of the position. Simply close it (for a profit or loss depending on the opening print), hold as a longer term investment or close and then sell puts at a lower level. I’ll mark this as a loss for tracking purposes, but wanted to share what could be done if you run into this in the future.
