Author: Bryan Halliday

The precious metals are gapping sharply lower this morning. This is great for our bear call spread. We are going to “delta hedge” it a little bit through buying some stock. Bought 35 shares of GLD at 429.59 We will likely unwind this trade when the market opens.

We see an opportunity to take advantage of merger arbitrage. WBD has agreed to be bought out by PSKY (Paramount) for 31/share in an all cash deal. We an excellent risk/reward/probability to arbitrage with the deal expected to close in the 3rd quarter of this year. Entered into a WBD bull call spread as follows: Buy to open: WBD Sep 18th (monthly) 28.00 strike call Sell to open: WBD Sep 18th (monthly) 30.00 strike call Debit: 1.05 Max risk = 1.05 or $105.00 per spread Max reward = 0.95 or $95.00 per spread

We exited our Adobe (ADBE) trade for near breakeven today. The stock worked its way a bit higher initially and has since settled back. That rally actually lagged many of its peers in the software space. It also reports earnings tomorrow and we have a bearish b-band setup on the chart. So, all things considered it is time for an exit.

Exited our ADBE Put Butterfly Spread as follows:
Sell to close: ADBE July 17^th (monthly) 300.00 strike call (ratio of 1)
Buy to close: ADBE July 17^th (monthly) 330.00 strike call (ratio of 2)
Sell to close: ADBE July 17^th (monthly) 360.00 strike call (ratio of 1)
Credit: 3.53
Loss of -0.10 or -$10.00 per spread traded

We recently doubled up our position size in PYPL on the stock price decline. We are selling the position back down from 400 to 200 shares and buying back the lower of the two covered call positions (exiting the 47.50 strike). In addition to these exits, we are selling puts to potentially repurchase these shares at lower prices. The details are shown below: Sold: PYPL (200 of the 400 shares owned) at 46.79 Buy to close: PYPL April 17th (monthly) 47.50 strike calls Debit: 2.65 Sold to open: PYPL April 17th (monthly) 42.50 strike puts (2 contracts to replace the shares sold) Credit: 1.16 We are using this money received (PYPL short puts) along with some of our existing cash from selling options that hasn’t been used to buy a few more shares of stock as follows: Bought 1 share of PANW at 164.18 Bought 2 shares of UBER at 75.37 Bought 1 share of CCJ at 111.41 Bought 1 share of ABNB  at 133.41

The software sector has been particularly affected by AI-related concerns, with Adobe (ADBE) being one of the companies most impacted. We have initiated a low-risk, high-reward strategy aimed at capturing a potential bounce in the stock. If Adobe recovers some of its recent losses, our trade stands to benefit. However, if the selling pressure continues—which remains a possibility—the trade carries a defined maximum risk. This strategy involves a longer-dated butterfly, so it will require patience as it unfolds over time. Buy to open: ADBE July 17th (monthly) 300.00 strike call (ratio of 1) Sell to open: ADBE July 17th (monthly) 330.00 strike call (ratio of 2) Buy to open: ADBE July 17th (monthly) 360.00 strike call (ratio of 1) Debit: 3.63 Max risk = 3.63 or $363.00 per spread Max reward = 26.37 or $2,637.00 per spread

PayPal (PYPL) stock is bouncing today on “bought out” rumors. We see a real value proposition with this stock at these prices. We have wanted to buy more when the trend started to turn, we suspect this helps that cause as it is now breaking above the gap down day. We doubled our position size taking us to 400 shares owned and 4 covered calls. The details as follows: Bought 200 shares of PYPL at 44.20 Sold to open: PYPL April 17th (monthly) 52.50 strike call Credit: 0.69 Max risk of this addition today = 43.51 (cost basis) x 200 shares = $8,702 in added risk with this addition.

We have exited our short-term trade in QQQ. Today was quite important for this trade with expiration on Friday. Sell to close: QQQ Feb 20th (monthly) 595.00 strike put (ratio of 1) Buy to close: QQQ Feb 20th (monthly) 585.00 strike put (ratio of 2) Sell to close: QQQ Feb 20th (monthly) 575.00 strike put (ratio of 1) Credit: 0.52 Loss of -0.35 or -$35.00 in the trade. We also closed our SLV put butterfly. If the moves aren’t breaking lower, then the targeted aspect won’t work out as expected. Sell to close: SLV Mar 20th (monthly) 65.00 strike put (ratio of 1) Buy to close: SLV Mar 20th (monthly) 55.00 strike put (ratio of 2) Sell to close: SLV Mar 20th (monthly) 45.00 strike put (ratio of 1) Credit: 1.65 Loss of -0.35 or -$35.00 in the trade.

We have arrived at February monthly options expiration. There was not a further decline into the expiration as was possible by the setup. Instead, the consolidation from the start of this year has held in place. As such, we are removing our SPY and QQQ positions. There is a small profit overall from trading these. In addition, we have some other options expiration positions to update/adjust as shown below.

Sell to close: SPY April 17th (monthly) 670.00 strike put (ratio of 1)
Buy to close: SPY April 17th (monthly) 640.00 strike put (ratio of 2)
Sell to close: SPY April 17th (monthly) 610.00 strike put (ratio of 1)
Credit: 2.33
Considering the prior exit, we made +$120 total across our original 3 contract position (+0.40 per contract).

Sell to close: QQQ May 15th (monthly) 580.00 strike put (ratio of 1)
Buy to close: QQQ May 15th (monthly) 550.00 strike put (ratio of 2)
Sell to close: QQQ May 15th (monthly) 520.00 strike put (ratio of 1)
Credit: 2.18
Loss of -0.21 or -$21.00 total in the trade.

We have had 200 shares of PYPL delivered to our account. We already sold a covered call early that expires today Feb 47 strike calls. We will move ahead and sell a couple more as follows:
Sell to open: PYPL April 17th (monthly) 47.50 strike call
Credit: 0.74
We took in +$54.00 of income from the Feb cc’s and this +$148 of income from the April cc’s and used it to buy 5 more shares of PYPL at 41.82 (we also used the tiny bit left over from TSSI because we were a couple of bucks short).

We will have 100 shares of TSSI delivered to our account this weekend (highly speculative stock).
We went ahead and sold a covered call early as follows:
Sell to open: TSSI April 17th (monthly) 12.50 strike call
Credit: 0.62
We took the +$62.00 of income and bought 7 more shares of the stock at 7.97/share (we had a couple bucks left over used to buy the extra PYPL share)

We paused our automated investment in PYPL in the Robinhood account. We turned on an automated investment in OXY in its place.

Our Cash Secured Put (naked put) in CCJ expires this weekend. We have replaced it with a short-term 1×2 put spread.
Buy to open: CCJ March 20th (monthly) 110.00 strike put (ratio of 1)
Sell to open: CCJ March 20th (monthly) 100.00 strike put (ratio of 2)
Debit: 0.52
Probable risk = 0.52 or $52.00 per spread
Max risk = owning 100 shares at a cost basis of 90.52/share
Max reward = 9.48 or $948.00 per spread

Our Cash Secured Put (naked put) in DELL expires this weekend. We have a pending order to replace it.
Sell to open: DELL April 17th (monthly) 100.00 strike put
Credit: 3.05 – still a pending order (has not filled)
Day order only – we will discuss on Monday
If the order does get filled, max risk = owning 100 shares at a 96.95 cost basis