Author: Bryan Halliday

We have taken a small profit on our LLY put butterfly. The trade is running out of time with an expiration of Oct 3rd. While it could create more profit, the probability is now more on the side of it finishing OTM at a max loss. We will exit and look for new opportunities.

Sell to close: LLY Oct 3rd (weekly) 700.00 strike put (ratio of 1)
Buy to close: LLY Oct 3rd (weekly) 670.00 strike put (ratio of 1)
Sell to close:  LLY Oct 3rd (weekly) 630.00 strike put (ratio of 1)
Credit:  3.50
Small profit of $0.30 per spread

We are adding a 1×2 put spread in Cameco (CCJ) today. Because there is a “naked” put involved, this only makes sense if willing to own 100 shares of stock at a much lower cost basis than current prices. The details are below:

Buy to open:  CCJ Oct 17th (monthly) 75.00 strike put (ratio of 1)
Sell to open:  CCJ Oct 17th (monthly) 70.00 strike put (ratio of 2)
Debit: 0.20
Probable risk = 0.20 or $20.00 per spread (if the stock finishes above 75/share)
Max reward = 4.80 or $480.00 per spread (the nearer to 70/share finish the better)
Max risk = owning 100 shares of CCJ at a cost basis of 65.20 per share (losses below 65.20)

We are adding a 1×2 put spread in PayPal (PYPL) today. Because there is a “naked” put involved, this only makes sense if willing to own 100 shares of stock at a much lower cost basis than current prices. The details are below:

Buy to open:  PYPL Nov 21st (monthly) 65.00 strike put (ratio of 1)
Sell to open:  PYPL Nov 21st (monthly) 60.00 strike put (ratio of 2)
Credit:  0.03
Probable reward = 0.03 or $3.00 per spread (if the stock finishes above 65/share)
Max reward = 5.03 or $503.00 per spread (the nearer to 60/share finish the better)
Max risk = owning 100 shares of PYPL at a cost basis of 54.97 per share (losses below 54.97)

As discussed on Monday. We are going to use the TOS account as a more active account. Utilizing the wheel strategy and spreads to generate profits. In addition, we will look to roll the income from our TOS trading into longer dated investments as shown below.

We will use the Robinhood account to automate some investing over time to smooth out the average cost basis.

These are “naked” put positions and will require our being willing to buy 100 shares of each stock (and have the capital to do so)!
Sell to open: CCJ Dec 19th (monthly) 55.00 strike put
Credit:  1.38
and
Sell to open: DELL Sep 19th (monthly) 110.00 strike put
Credit: 1.65

We received income of $138.00 & $165.00 =  $301.70 total after commissions.
We are using that income to purchase a few stock shares (using the money supplied from the market to build shares).
We bought 1 share of CCJ at 70.31
We bought 1 share of DELL at 129.40
We bought 1 share of UBER at 92.72
and that left with $9.27 left over in cash

Two of our option trades will likely need to have a partial exit before the close of trading today. The KHC put butterfly and OXY call butterfly specifically. In both cases, only the long leg moving ITM will need to be closed. The other legs will expire OTM and need no adjustment. If your broker will not allow you to be “naked” for the remainder of the day or you wish to play it safe. Simply close an equal quantity of the short legs. For example, If I sell 3 contracts of the OXY 45 calls. I would also buy back 3 contracts of the short 47.50 calls.

Before the close of trading today.
Sell to close: OXY Aug 15th (monthly) 45.00 strike calls (all contracts)
Credit: as much as possible
&
Sell to close: KHC Aug 15th (monthly) 27.50 strike puts
Credit: as much as possible

We have arrived at August monthly options expiration. We are going to switch up the Trading Mentors program. We are excited about a new concept we have been working on and will introduce the journal and strategy on Monday. We think it will be a good learning opportunity for our traders which is ultimately the goal of this program. Also we are optimistic about it given our overall broad market outlook over the next few years. So, lots of exits of positions today and over the weekend.

We have sold our LLY stock position 9 shares at 695.00
We have sold our BRKB stock position 15 shares at 481.80
We have sold our PANW stock position 20 shares at 174.25
We have sold our EQT stock position 100 shares at 52.33
We have sold our OXY stock position 100 shares at 44.70

NUE – we have the 135.00 strike covered calls. We are leaving this position alone and it will get “called away” and we will make further adjustments on Monday.

We have sold our SNAP stock position 600 shares at 7.15
We have bought back 3 contracts of the SNAP Sep 8.00 strike calls at 0.13 debit

We have sold our PYPL stock position 100 shares at 69.66
We have bought back 1 contract of the PYPL Aug 70.00 strike calls at 0.22 debit

We have closed our VIX Nov 19th (monthly) 25-40-55 call butterfly for 0.86 credit

We have closed our BRK/B Oct 17th (monthly) 1×2 put spread for 1.25 credit

PYPL – we have the 75.00 strike covered calls. We are leaving this position alone and the call will expire OTM. We will make further adjustments on Monday.
EQT – we have the 60.00 strike covered calls and the 51-48 bear put spread. We are leaving these positions alone and they will likely expire OTM. We will make further adjustments on Monday.
SNAP – we have the 11.00 strike covered calls. We are leaving this position alone and the covered call will expire OTM. We will make further adjustments on Monday.
OXY – we have the 40.00 strike short put. We are leaving this position alone and the put will expire OTM. We will make further adjustments on Monday.
OXY – we also have the 45-47.5-50 call butterfly. We are leaving this position alone and it will likely expire OTM. We will make further adjustments on Monday.
SPY – we have the 623-600-578 put butterfly. We are leaving this position alone and it will expire OTM. We will make further adjustments on Monday.
CCJ – we have the 65-55 1×2 put spread. We are leaving this position alone and it will expire OTM. We will make further adjustments on Monday.
KHC – we have the 27.5-25-22.5 put butterfly. We are leaving this position alone and it will expire OTM. We will make further adjustments on Monday.

A few changes to the portfolio today. Bought 10 shares of BRK/B at 465.14 Bought 10 shares of PANW at 168.97 Bought 6 shares of LLY at 638.25 Bought 300 shares of SNAP at 7.39 We are selling covered calls against these SNAP shares purchased Sell to open: SNAP Sep 19th (monthly) 8.00 strike calls Credit: 0.29 We already have a covered call in PYPL but we are double dipping a little bit Sell to open: PYPL August 15th (monthly) 70.00 strike call Credit: 0.42 Both the 70 and 75 calls will expire next week. We will need to hedge the 75 call if the stock explodes higher (low probability).