Hello Investors,
Today we discussed debit spread strategies. This is typically used as a directional trading strategy. As such there is risk to theta (time decay) if the trade is not moving in your direction. However, it often creates a good risk/reward ratio. It allows you to profit from an upside move with less risk if the stock were to move against you. In this case, we took a trade in Pinterest (PINS) as shown below.
Buy to open: Aug 21st (monthly) 21.00 strike callsSell to open: Aug 21st (monthly) 26.00 strike callsDebit: 1.95Max risk = 1.95; Max reward = 3.05
In addition, we added our final 20 shares of BRK.B shares. Berkshire Hathaway has detailed this price level as where they are buying back their own shares. It is our opinion that they are likely actively buying as we speak. At around 1x book value is historically where you want to be aggressively buying BRK shares.
Bought 20 shares of BRK/B at 177.07 per share.
Markets are closed on Friday for Independence Day Holiday. Have a great long weekend!