Author: Bryan Halliday

 

We own put butterfly spreads in Berkshire (BRKB). We have taken profits in them today. We will discuss them live in class. Sell to close: BRKB Oct 20th (monthly) 345.00 strike put (ratio of 1) Buy to close: BRKB Oct 20th (monthly) 335.00 strike put (ratio of 2) Sell to close: BRKB Oct 20th (monthly) 325.00 strike put (ratio of 1) Credit: 1.35 Because we own 2 spreads, this locks-in a total profit of +$90.00 overall as we exited them both.

 

We have a pending order to attempt to close the butterfly spread on SNOW for a profit as follows: Sell to close:  SNOW Oct 20th (monthly) 145.00 strike put (ratio of 1) Buy to close: SNOW Oct 20th (monthly) 135.00 strike put (ratio of 2) Sell to close:  SNOW Oct 20th (monthly) 125.00 strike put (ratio of 1) Credit:  2.16 – this is a pending order and has not filled as of yet We entered for 1.36 debit and exited at 2.16 credit, the result would be a profit of +$80.00 overall.

We have rolled down and out again on our short puts in TGT. We are most interested in getting our cost basis down as low as possible. The details are as follows: Buy to close: TGT Sep 29th (weekly) 117.00 strike put Sell to open:  TGT Oct 6th (weekly) 115.00 strike put Debit: 1.50 In addition, we have some profit from our recent trading. We have used it to buy the following stocks. Bought 10 shares of OXY at 65.20 Bought 10 shares of BKR at 36.14 Bought 5 shares fo DKS at 106.56

 

We rolled down and out on our TGT short puts as follows: Buy to close: TGT Sep 22nd (weekly) 119.00 strike put Sell to open:  TGT Sep 29th (weekly) 117.00 strike put Debit: 1.30We entered into a new bull put credit spread trade idea in JD. Sell to open:  JD Jan 19th, 2024 (monthly) 30.00 strike put Buy to open:  JD Jan 19th, 2024 (monthly) 27.50 strike put Credit: 0.96 Max reward = 0.96 or $96.00 per spread Max risk = 1.54 or $154.00 per spread

 

The markets have broken lower since the Fed meeting yesterday. There were some added risks in the meeting. The first and most obvious is price movement. But another risk would be a drop in volatility post event (vol crush). We would have been better served to hold onto a couple of the bearish trades we exited yesterday but we think it was the right call for the time. And importantly, there is plenty of time/opportunity for new ideas. We will make a few more adjustments today as follows: We rolled down and in on our BRK-B covered calls as follows: Buy to close: BRKB Nov 17th (monthly) 380.00 strike calls Sell to open: BRKB Oct 20th (monthly) 375.00 strike calls Debit:  1.31 – this order has filled We rolled in on our DIS short puts as follows: Buy to close: DIS Oct 20th (monthly) 85.00 strike put Sell to open: DIS Sep 29th (weekly) 85.00 strike put Debit:  0.80 – this order has filled Bought a put butterfly in SNOW as follows: Buy to open: SNOW Oct 20th (monthly) 145.00 strike put (ratio of 1) Sell to open: SNOW Oct 20th (monthly) 135.00 strike put (ratio of 2) Buy to open: SNOW Oct 20th (monthly) 125.00 strike put (ratio of 1) Debit:  1.36 – this order has filled Max risk = 1.36 or $136.00 per spread Max reward = 8.64 or $864.00 per spread

We have a new trade idea and we are taking down three (3) bearish trades. The result is a roughly breakeven in 2 of them and a profit in the 3rd. New Trade Idea in PAAS Bought 100 shares at 16.34 Sell stop-loss below at 15.52 good til canceled (gtc) order Exiting our QQQ Bear Call Spread: Buy to close: QQQ Jan 19th (monthly) 380.00 strike call Sell to close:  QQQ Jan 19th (monthly) 380.00 strike call Debit: 4.60 Entered at 4.55 credit, result is -0.05 per spread or a loss of -$5.00 total (roughly breakeven). Exiting our XLI Put Butterfly Spread: Sell to close: XLI Nov 17th (monthly) 105.00 strike put (ratio of 1) Buy to close: XLI Nov 17th (monthly) 100.00 strike put (ratio of 2) Sell to close: XLI Nov 17th (monthly) 95.00 strike put (ratio of 1) Credit: 0.75 Entered at 0.77 debit, result is -0.02 per spread or a loss of -$2.00 total (roughly breakeven). Exiting our SPY Put Butterfly Spread: Sell to close: SPY Dec 15th (monthly) 450.00 strike put (ratio of 1) Buy to close: SPY Dec 15th (monthly) 425.00 strike put (ratio of 2) Sell to close: SPY Dec 15th (monthly) 400.00 strike put (ratio of 1) Credit: 4.45 Entered at 3.50 debit, result is +0.95 per spread or a profit of +$95.00 total.

We have just passed September monthly options expiration and so we have started the process of re-selling covered calls and other adjustments. The details as follows: Below are standard covered calls (we own stock and selling calls for income): Sold to open: CVX Nov 17th (monthly) 180.00 strike call Credit: 1.36 – this order has filled Sold to open: Z Oct 20th (monthly) 52.00 strike call Credit: 0.56 – this order has filled Sold to open: DIS Oct 20th (monthly) 95.00 strike call Credit: 0.33 – this order has filled Sold to open: GOLD Nov 17th (monthly) 19.00 strike call Credit: 0.16 – this is still pending order Below are short put trades where we are obligated to buy 100 shares of stock if below the put strike price at expiration. This only makes sense if willing to own the stock and have the available cash. Sold to open: MTCH Oct 20th (monthly) 40.00 strike put Credit: 0.65 – this order has filled Sold to open: Z Oct 20th (monthly) 45.00 strike put Credit: 1.09 – this order has filled Sold to open: DIS Oct 20th (monthly) 85.00 strike put Credit:  2.03 – this order has filled Sold to open: TGT Sep 22nd (weekly) 119.00 strike put Credit: 1.15 – this order has filled Finally, these are 1×2 call spread which are option positions against 100 shares of stock owned. Buy to open: SNOW Oct 20th (monthly) 165.00 strike call (ratio of 1) Sell to open: SNOW Oct 20th (monthly) 180.00 strike call (ratio of 2) Debit: 2.15 – this order has filled Buy to open: WBA Nov 17th (monthly) 25.00 strike call (ratio of 1) Sell to open: WBA Nov 17th (monthly) 27.50 strike call (ratio of 2) Debit: 0.13  – this is still pending order

We have arrived at September monthly options expiration today. A few updates/changes below: We have covered calls/short puts in the following that will expire for a max gain of the credit received (no adjustment needed): CVS Sep 80.00 call CVX Sep 170.00 call CVX Sep 140.00 put DIS Sep 115.00 call GOLD Sep 20.00 calls MTCH Sep 42.50 put SNOW Sep 180.00 call TGT Sep 122.00 put VZ Sep 33.00 put WBA Sep 32.50 call Z Sep 60.00 call Z Sep 45.00 put We own 200 shares of CVS and 2 covered calls. The 80 strike call will expire. The 70 strike covered call is ITM and we need to roll it up and out. We are rolling out and up on the 70 calls and then selling an extra 75 call because we own 200 shares. Buy to close: CVS Sep 15th (monthly) 70.00 strike call (ratio of 1) Sell to open: CVS Oct 20th (monthly) 75.00 strike call (ratio of 1) Debit: 0.22 Sell to open: CVS Oct 20th (monthly) 75.00 strike call (ratio of 1) Credit: 0.41 We own 200 shares of DELL and 2 covered calls (previous roll up worked out great). We are letting 100 be “called away” and replacing that with a short put (to attempt to repurchase lower). We are also rolling the call on the other 100 shares. Details below: Buy to close: DELL Sep 15th (monthly) 65.00 strike call (1 contract) Sell to open:  DELL Nov 17th (monthly) 70.00 strike call (1 contract) Debit: 1.90 Sell to open: DELL Oct 20th (monthly) 67.50 strike put (1 contract) Credit: 1.10

A few updates. First, we were stopped out on our -30 shares short of QQQ for a loss of -$99.30. We entered into a stock trade in ZM as follows: Bought 20 shares of ZM at 71.12 Sell stop loss below at 66.20 good til canceled (GTC) order We took profits on our ABBV call butterfly spread as follows: Sell to close:  ABBV Oct 20th (monthly) 150.00 strike call (ratio of 1) Buy to close: ABBV Oct 20th (monthly) 160.00 strike call (ratio of 2) Sell to close:  ABBV Oct 20th (monthly) 170.00 strike call (ratio of 1) Credit: 4.10 We bought this for 2.20 debit, the result is a profit of +$200 per spread.

We are closing the FSLR butterfly as follows: Sell to close:  FSLR oct 20th 185 strike put (ratio of 1) Buy to close:  FSLR oct 20th 170 strike put (ratio of 2) Sell to close:  FSLR oct 20th 155 strike put (ratio of 1) Credit: 4.25 Entered the trade for a debit of 2.60 and exiting for a credit of 4.25 for a $165 profit