Second, we exited the lower strike long call in our KVUE spread. This is the “money maker”. The deal for KVUE is not expected to close until the back half of this year. It seems unlikely that there is another buyer. We expect the stock now to simply gravitate around 17ish per share through March expiration. So, we exited the call and bought a few shares as a delta hedge against any risk above 20/share. This is an aggressive and higher risk adjustment because we are now “naked” on 1 of the 20 strike calls. The stock would have to surge above that level by March expiration (unlikely) but anything is possible. Rather than this adjustment, one could simply exit the entire call butterfly spread and take a small profit!
Sold short 20 more shares of QQQ at 624.05
Adjusted the stop-loss to reflect 50 shares total.Sold to close: KVUE March 20th (monthly) 17.00 strike call
Credit: 0.78
Bought 20 shares of KVUE stock to hedge risk against a big upside move (unlikely)