Trade Alert 8/15/2024

Our APA short puts have worked really well. They are likely to exercise us into 100 shares of the stock over the weekend (currently slightly ITM). We are buying those puts back and closing the trade and then reselling a short put at a later expiration and lower strike price. This is called “rolling down” the short put position. It effectively gives us the potential to get a much better cost basis if the stock goes lower through next month. Buy to close: APA Aug 16th (monthly) 30.00 strike put Sell to open: APA Sep 20th (monthly) 27.50 strike put Debit: 0.27 This locks in a profit of +1.38 or +$138.00 in the original short put. Provides us with +0.55 of income for the Sep put. And moves our potential cost basis down a couple of bucks! We have decided to let our U.S. Steel (X) stock get called away this weekend from our covered call. However, we are adding a 1×2 put spread that can get us back into the stock if the stock pulls back in price. And we will get paid to do it. Part #1- Doing nothing with our X stock and short call. We will be “called away” at 40/share. We bought at 37/share. The result is a profit of +$300.00 in the stock. Plus we have made money in the premiums collected over the past couple of months. Part #2- Today we added a 1×2 put spread. This will require us to buy back into the 100 shares being sold IF the stock goes down below both strike prices. The details are as follows: Buy to open: X Sep 20th (monthly) 42.00 strike put (ratio of 1) Sell to open: X Sep 20th (monthly) 40.00 strike put (ratio of 2) Credit: 0.37 Max risk = repurchasing 100 shares of stock at a cost basis of 38.37