... for a .32/contract credit. Notes: A continuation of a long call diagonal with the back month at the 16 out in January. (See Post Below). Rolling a smidge early here in advance of vacation. Cost basis in the diagonal now 8.08 - .32 or 7.76/contract with a resulting break even of the long call strike (16) plus 7.76 or 23.76.
... for a .41/contract credit. Notes: With only .11 worth of extrinsic left in the April 16th 26, rolled the short call down to the May 21st 25 for a .41/contract credit. Cost basis in the diagonal now at 8.08 with a 24.08 break even and a current max profit potential of .92/contract on a nine wide (10.2% ROC at max, which assumes a finish above the short call strike).
... for an 8.74/contract debit. Notes: In lieu of selling short puts, taking advantage of SLV skew here with a long call diagonal, buying the back month 91 delta and selling the front month 43. Paying 8.74 for a 10-wide with a max profit metric of 1.16/contract (13.3% ROC) with ample opportunity to reduce cost basis further and therefore increase max profit...
*Long Call Diagonal ... for a 6.83 debit. Notes: The smaller account, skip month long call diagonal referenced in my INTC (IRA) Post (See Below). Buying the back month 90, selling the front month monied 75. Metrics: Max Profit: .67 Max Loss: 6.83 ROC at Max: 9.8%/70.1% annualized. Break Even: 44.33 Delta/Theta: 17.45/1.4
Nordstrom has been a big loser since COVID-19 and is on a long-term downtrend. However, it's been on a short-term uptrend since late August and just blew through its July highs. The next objective will be the early August highs around $17.50. Our goal is to ride the short-term trend for as long as it lasts during September and October. We don’t want to own this...
... for a 2.55/contract debit. Metrics: Max Loss on Fill: $255 Max Profit on Fill/ROC% at Max: $45 (17.6% at Max) Break Even: 6.55 Debit Paid to Spread Width Ratio: 85% Delta/Theta: 47.07/.53 Notes: A small, bullish assumption trade in Ford in one of my favorite synthetic covered call setups. The debit paid to spread width ratio isn't what I generally like to...
Back into PBR again after taking off my previous long call diagonal at near max yesterday. Metrics: Max Loss on Setup: $217/contract Max Profit on Setup: $83/contract Break Even: 8.17 versus 8.72 spot Debit Paid to Spread Width Ratio: 72.3% Notes: Still think this has some room to run here. Went out a little farther in time with the front month to bring in...
... for a 3.00/contract debit. Metrics: Max Loss on Setup: $300/contract Max Profit on Setup: $100/contract (33.3% ROC) Break Even: 7.00 Debit Paid to Spread Width Ratio: 75% Notes: High background implied at 118% with plenty of opportunity to reduce cost basis via roll if it discontinues its grind up.
Back to the "Weed Well" immediately post earnings with 30-day still ginormous at 198% while I wait for June opex ... . Metrics: Max Loss: 2.89/contract Max Profit: 1.11/contract Debit Paid to Spread With Ratio: 72.2% Break Even: 8.89 versus 10.01 spot Notes: Extrinsic collected with the short call far exceeds that in the long, so I make money if it just sits...
Another financial that has recovered some, but probably has some room to run back to pre-COVID-19 levels .... . Metrics: Max Loss on Setup: $918 Max Profit on Setup: $332 Break Even: 31.68 versus 32.63 spot Debit Paid to Spread Width Ratio: 73.44% Notes: I like to do these split month, but there's no September available, so had to go out to October to buy the...
I've done quite a few of these recently in the sell-off. Here's one that hasn't recovered a ton ... . Metrics: Max Loss on Setup: $550 Max Profit on Setup: $150 (27.3% ROC) Break Even: 25.50 versus 25.75 spot Debit Paid/Spread Width Ratio: 78.6% Notes: You know the drill. Manage these like a covered call, rolling the short call out on approaching worthless...
... for a 1.38/contract debit. Metrics: Max Loss: $138/contract Max Profit/Return on Capital: $62/contract; 44.93% Break Even: 6.38/share Notes: Another small, bullish assumption engagement trade with the back month at the 76 delta, front at the 49, and a break even at or below where the stock is currently trading.
... for a 2.27/contract credit. Metrics: Max Profit on Setup: .23 ($23)/contract Max Loss on Setup: 2.27 ($227)/contract Break Even on Setup: 5.27 versus 5.41 spot Debit Paid to Spread Width Ratio: 90.8% Notes: Re-upping with a small engagement trade in Ford while I wait on June mopex trades. Here, the debit paid to spread width ratio kind of stinks, so my...
... for a 2.38/contract debit. Metrics: Max Loss: $238/contract Max Profit: $62/contract Return on Capital at Max: 26.05% Break Even: 6.38 versus 6.95 Spot Debit Paid/Spread Width Ratio: 79.3% Notes: Another small, bullish assumption engagement play while I wait for April opex.
... for a 1.73 debit/contract. Metrics: Max Loss: $173/contract Max Profit/Return on Capital: $27/contract ; 15.6% Break Even: 4.73/share Notes: A small, defined risk engagement trade here in Ford. The metrics generally aren't what I'm looking for in one of these setups (25% ROC or greater), but I'm selling the front month shortie at-the-money, so that's to be...
... for a 4.89 debit. Metrics: Max Profit: $111/contract Max Loss: $489/contract Break Even: 20.89 Delta/Theta: 38.75/.98 Debit Paid to Spread With Ratio: 81.5% Notes: Going long XOP at long-term lows with a 90/50 long call diagonal (i.e., 90 delta for the long call/50 for the short). Going a little more aggressive with the short call than I usually would to...