Author: Bryan Halliday

We are placing a very short-term bear call spread on QQQ. This has an expiration of tomorrow. We would like to use this to get “short” QQQ in some capacity (probably through options) if we continue to bounce. This is a low reward/higher risk strategy. Sell to open:  QQQ April 11th (weekly) 465.00 strike call Buy to open:  QQQ April 11th (weekly) 468.00 strike call Credit:  0.64 Max risk = 2.36 or $236.00 per spread Max reward = 0.64 or $64.00 per spread If QQQ surges sharply, we will likely roll this out to a later expiration. If it expires we plan to use the income to purchase a very short-term bearish spread in the near future.

We are closing the protective puts in XLE for a profit today. We like our bear call spread and will leave it in place. If the market bounces and VIX falls as expected, we will potentially revisit this and buy again. Sell to close:  XLE May 16th (monthly) 60.00 strike puts Credit:  1.05 Sold all 3 contracts

A couple of changes to the portfolio today ahead of the weekend. We have sold a short put on PYPL to buy 100 shares more of the stock at lower prices. If the stock is “put” to us in May that will use up the remainder of our cash at this time. Of course, we always have an influx of capital going into the account each month. We like the probability of being able to generate income and paying off our investment in PYPL over the coming years from the income received in the options market. Sell to open: PYPL May 16th (monthly) 55.00 strike put Credit: 2.80 Max risk = owning 100 shares of stock at a 52.20 cost basis Max reward = 2.80 or $280.00 per contract We are buying back (lock in profits) on one of our covered calls in CCJ. And then replacing it with a 1×2 call spread as follows: Buy to close: CCJ May 16th (monthly) 50.00 strike call Debit: 0.29 Buy to open: CCJ June 20th (monthly) 42.00 strike call (ratio of 1) Sell to open: CCJ June 20th (monthly) 48.00 strike call (ratio of 2) Debit: .37 Max risk = .37 or $37.00 per spread Max reward = 5.63 or $563.00 per spread

We entered into a new stock position. We are buying 100 shares of PYPL which has come down significantly. The stock now trades with a forward p/e of 13.05 and a PEG ratio of 0.84. The EV/EBITDA is 9.43. All value numbers overall. The growth is a concern but the revenues have been growing around 10% and are expected to continue. We expect that even if the stock disappoints, it is likely to only go sideways. If it rebounds, then the upside could be significant long-term.

Bought 100 shares of PYPL at 66.30
Sold to open: PYPL May 16th (monthly) 75.00 strike call
Credit: 1.18

We placed this order as a “buy write” or “covered stock” and paid a total debit of 65.12

We are closing the butterfly on GOOG for a profit as follows: Sell to close:  GOOG Sep 19th (monthly) 165.00 strike put (ratio of 1) Buy to close: GOOG Sep 19th (monthly) 145.00 strike put (ratio of 2) Sell to close:  GOOG Sep 19th (monthly) 125.00 strike put (ratio of 1) Credit:  4.23 Profit of $1.16 or +$116.00 per spread traded

We have entered into a longer dated put butterfly in Gamestop (GME). The company announced a new process of buying Bitcoin with their available cash. They are at the point in time where they are grasping at anything to try to save their business and drive the next spike higher in the shares. The new trade idea is detailed below:

Buy to open:  GME Oct 17th (monthly) 20.00 strike put (ratio of 1)
Sell to open:  GME Oct 17th (monthly) 15.00 strike put (ratio of 2)
Buy to open:  GME Oct 17th (monthly) 10.00 strike put (ratio of 1)
Debit: 0.88 – this order has been filled
Max risk = 0.88 or $88.00 per spread traded
Max reward = 4.12 or $412.00 per spread traded

The options have a little bit wider bid/ask spreads due to wild volatility in this stock. As such it is important that we do the entire spread together and not try to “leg in” to the butterfly. It also makes it more likely that will hold onto this trade much closer to the expiration. A little different than something like our GOOG trade where it has a bit more liquidity and we could take profits at any time.

We have now passed March monthly options expiration. As such, many of our covered calls expired for a full profit of the credit received. We have replaced them this morning as follows: Selling a cc on EQT and this is 50 shares “naked” because we will have 2 short calls and only 150 shares of stock. Sell to open: EQT June 20th (monthly) 60.00 strike call Credit: 1.74 Sell to open: CCJ May 16th (monthly) 50.00 strike call Credit: 1.45 Sell to open: OXY May 16th (monthly) 55.00 strike call Credit: 0.44 Sell to open: X May 16th (monthly) 47.00 strike calls Credit: 1.95 Turning NKE into a call butterfly with the following addition: Buy to open: NKE April 17th (monthly) 70.00 strike call (ratio of 1) Sell to open: NKE April 17th (monthly) 75.00 strike call (ratio of 2) Debit: 0.63 These two legs will combine with the long 80.00 strike call we own from our prior diagaonal spread trade. All of these orders have been filled, we will discuss in class this morning!

March monthly options expiration is this week. FOMC meeting is later today. We are setup well with most of our positions. We will “roll out” a short call in EQT that is currently ITM as follows: Buy to close: EQT March 21th (monthly) 51.00 strike call Sell to open:  EQT April 17th (monthly) 55.00 strike call Debit:  0.55 An update on our other positions. The following covered calls are setup to expire OTM for a max profit: EQT 60.00 call OXY 57.50 call CCJ 65.00 call APA 27.50 call NKE 82.50 call X 50.00 calls