Trade Alert 8/1/2024

Our CCJ position is falling on an analyst downgrade. We sold more covered calls than shares owned but that hasn’t offset this much downside. We like the position but it clearly has gone down more than expected in the short-term. So we are adding a put butterfly as a tail-risk hedge. This is a great risk/reward but it is way OTM in strike prices. So, the idea will be to potentially squeeze out a bit of profit to offset some of the loss in the stock if selling gets severe. This hedge is low probability and the most likely outcome is the loss of the $40 paid per spread. Buy to open:  CCJ Sep 20th (monthly) 35.00 strike put (ratio of 1) Sell to open: CCJ Sep 20th (monthly) 30.00 strike put (ratio of 2) Buy to open:  CCJ Sep 20th (monthly) 25.00 strike put (ratio of 1) Debit: 0.40 Max risk = 0.40 or $40.00 per spread Max reward = 4.60 or $460.00 per spread