Trade Alert 2/9/2024

There is no question that sharp bull market trends are the most difficult for our approach. It puts covered calls to the test. It moves outside of normal standard deviations and not by just a little bit. Even some of the roll-up and roll-out type of option adjustments haven’t been enough overall. Important to keep the long-term perspective through any short-term move. But also we need to manage risks, so we will make a couple of adjustments today. We bought a very short-term call butterfly in SNOW. We have March covered calls so expiration is not right around the corner. But the price moves can become extreme in the short-term. So, we will hedge off some of the covered call risk by spending a little money on a bullish trade. Buy to open:  SNOW Feb 16th (monthly) 235.00 strike call (ratio of 1) Sell to open:  SNOW Feb 16th (monthly) 250.00 strike call (ratio of 2) Buy to open:  SNOW Feb 16th (monthly) 265.00 strike call (ratio of 1) Debit:  2.75 – order has filled Max risk = 2.75 or $275.00 per spread Max reward = 12.25 or $1,225.00 per spread We own 200 shares of OXY and only have 1 covered call. The company reports earnings next week. We have added a 1×2 call spread against the other 100 shares. Buy to open:  OXY Feb 16th (monthly) 59.00 strike call (ratio of 1) Sell to open:  OXY Feb 16th (monthly) 61.00 strike call (ratio of 2) Debit: 0.18 – order has filled We have two covered calls against 200 shares owned of Disney (DIS). We are rolling only 1 of them up. Buy to close:  DIS Feb 16th (monthly) 105.00 strike call Sell to open:  DIS Feb 16th (monthly) 110.00 strike call Debit: 2.95 – order has filled We have a February and March covered call against or DKNG shares. We are rolling up the Feb call as follows: Buy to close:  DKNG Feb 16th (monthly) 42.00 strike call Sell to open:  DKNG Feb 16th (monthly) 45.00 strike call Debit: 1.40 – order has filled