Author: Bryan Halliday

We have arrived at May monthly options expiration, and as a result, several of our trades are approaching expiration. These positions are all 1×2 put spreads, and based on the current market strength, they are likely to expire out of the money. This highlights one of the advantages of the 1×2 put spread structure, as the initial debit is typically quite small. The main exception was CEG due to the higher stock price. There is still a slight possibility we may be able to sell that position for some remaining value. For that to happen, CEG or any of the other underlying stocks would need to experience a sharp decline today, which is not the most likely scenario but still worth monitoring closely. If any of these positions do move sharply lower, look to sell the put spread for as much value as possible — the higher the credit received, the better. OXY 55.00/50.00 1×2 put spread is currently set to expire out of the money. UBER 70.00/62.50 1×2 put spread is currently set to expire out of the money. CEG 260.00/230.00 1×2 put spread is currently set to expire out of the money. CCJ 100.00/90.00 1×2 put spread is currently set to expire out of the money.

Today, we entered bullish call butterfly spreads on Blackstone (BX). The stock appears to be making a bearish to bullish reversal on the shorter-term charts. The bull case for Blackstone is that it continues to benefit from the massive growth in alternative investments like private credit, infrastructure, and real estate. As more institutional money flows into these areas, Blackstone’s assets under management and recurring fee income continue to grow. The company also has strong exposure to long-term trends like AI infrastructure and data centers, while paying an attractive dividend. The simple bull case is that BX keeps compounding earnings and cash flow as alternatives become a larger part of global investing. Buy to open: BX Aug 21st (monthly) 125.00 strike call (ratio of 1) Sell to open: BX Aug 21st (monthly) 135.00 strike call (ratio of 2) Buy to open: BX Aug 21st (monthly) 145.00 strike call (ratio of 1) Debit: 1.40 Max risk = 1.40 or $140.00 per spread Max reward = 8.60 or $860.00 per spread

Today, we entered bearish put butterfly spreads on Nike (NKE). While this is considered a lower-probability setup, the combination of risk/reward and overall probability creates an interesting opportunity. This position can also serve as a soft hedge, since the value of the put butterfly may increase if our underlying stock positions decline in value. The trade details are as follows: Buy to open: NKE Aug 21st (monthly) 40.00 strike put (ratio of 1) Sell to open: NKE Aug 21st (monthly) 35.00 strike put (ratio of 2) Buy to open: NKE Aug 21st (monthly) 30.00 strike put (ratio of 1) Debit: 0.85 Max risk = 0.85 or $85.00 per spread Max reward = 4.15 or $415.00 per spread

Today we entered into a bearish put butterfly on Bitcoin. We think that the explosive move higher in all things AI (chips, data centers, uranium etc) takes interest away from Bitcoin. The need for this area of the market is becoming more debated with AI. In addition, Gold and Silver have out-paced Crypto for some time now. We suspect there is another leg lower and entered a butterfly as follows:
Buy to open: IBIT Sep 18th (monthly) 45.00 strike put (ratio of 1)
Sell to open: IBIT Sep 18th (monthly) 35.00 strike put (ratio of 2)
Buy to open: IBIT Sep 18th (monthly) 25.00 strike put (ratio of 1)
Debit: 1.97
Max risk = 1.97 or $197.00 per spread
Max reward = 8.03 or $803.00 per spread

• Bought 22 shares of CAH at 199.00
• OCO (one-cancels-other) bracket orders attached:
  • Sell 22 shares at 231.00 (limit)
  • Sell 22 shares at 185.30 (stop loss)
• All OCO sell orders are set as GTC (good ‘til canceled)

On Monday, we initiated several OGN positions as merger arbitrage strategies. We were successfully filled on the long calls, though not on the attempt for the bull call spread order. We have since adjusted the position by converting it into a bull call spread through the sale of a higher-strike call against the long calls. As a result, we now hold the January 2027 $12.50/$14.00 Bull Call Spread for a net debit of $1.00. With this defined-risk options position now in place, we exited the higher-risk stock position today. The details are below: Sold our 100 shares of OGN at 13.34 Completed the Bull Call Spread Sell to open: OGN Jan 15th, 2027 (monthly) 14.00 strike calls Credit: 0.15 This completes the Bull Call spread Max risk = 1.00 or $100.00 per spread Max reward = 0.50 or $50.00 per spread This merger needs to be successfully completed more than 67% of the time to generate a positive expected return, and based on our analysis, we believe the probability of closing absolutely exceeds that threshold.

There is an FOMC meeting today, and rates are widely expected to remain unchanged. Market expectations have also shifted from pricing in multiple rate cuts this year to recognizing that additional hikes are still possible. Higher interest rates are generally a negative for precious metals because gold and silver do not produce income or dividends. When rates rise, investors can earn more attractive yields in cash, bonds, and other interest-bearing assets, which increases the opportunity cost of holding metals. Higher rates also tend to strengthen the U.S. dollar, making precious metals more expensive for foreign buyers and often creating additional selling pressure. We established a bearish position in SPDR Gold Shares, and the trade has performed well. At this point, it becomes a more difficult decision, as the position could either move sharply against us or continue lower in our favor. With this morning’s gap down, we are choosing to lock in profits. That said, for those seeking additional downside exposure, holding the position longer could still make sense—just with a higher risk/reward profile. We haven’t Taking profits on our GLD Put Butterfly as follows: Sell to close: GLD Aug 21st (monthly) 420.00 strike put (ratio of 1) Buy to close: GLD Aug 21st (monthly) 390.00 strike put (ratio of 2) Sell to close: GLD Aug 21st (monthly) 360.00 strike put (ratio of 1) Credit: 5.80 We entered this position at 3.80 debit and exit at 5.80 credit. The result is a profit of +2.00 or +$200.00 per spread traded.

Today, we initiated an aggressive position in Berkshire Hathaway. Our preference is to continue building this into a much larger allocation on any further pullback. A key part of our thesis is Berkshire’s ongoing stock repurchase program. The company has the flexibility to buy back shares whenever they are trading below intrinsic value, and in recent years has deployed tens of billions of dollars toward repurchases. These buybacks are funded by Berkshire’s massive cash position and are executed by the CEO’s discretion but without a doubt, input from Warren Buffett. This creates a natural “buyer of last resort” dynamic that can help support the stock during periods of weakness. To express this view, we implemented a layered strategy: We purchased shares outright to establish immediate exposure. We sold a put option with the intention of acquiring a significantly larger position at a lower effective price if the stock declines. A call butterfly spread to benefit in the event the stock moves higher quickly without giving us the pullback we prefer. The full trade details are outlined below: Bought 6 shares at 469.53 inside of Robinhood Sold to open: BRKB June 18th (monthly) 450.00 strike put Credit: 5.55 Max reward = 5.55 or $555.00 of income received Max risk = owning 100 shares at a cost basis of 444.45 or $44,445 invested (large position and risk) Finally, we are attempting to buy a call butterfly but it has not filled as of this update. Buy to open: BRKB June 18th (monthly) 475.00 strike call (ratio of 1) Sell to open: BRKB June 18th (monthly) 500.00 strike call (ratio of 2) Buy to open: BRKB June 18th (monthly) 525.00 strike call (ratio of 1) Debit: 5.00 Max risk = 5.00 or $500.00 per spread Max reward = 20.00 or $2000.00 per spread