Hello Investors,
A few changes were made to the portfolio today. We added a new position in Berkshire Hathaway. It is a 1×2 put spread but because 1 of the short puts is “naked” it would require us to buy 100 shares of stock if the stock were to fall sharply lower. It is very unlikely to fall that far but is a possibility that we would be all right with overall. If you are not willing to own 100 shares of BRKB shares, consider a butterfly instead. We also rolled a couple of our positions to lock-in profits and move to more favorable strikes. The details are shown below.
New 1×2 put spread in BRK.B:
Buy to open: BRKB Oct 17th (monthly) 450.00 strike put (ratio of 1)
Sell to open: BRKB Oct 17th (monthly) 420.00 strike put (ratio of 2)
Debit: 0.58
Likely risk = 0.58 or $58.00 per spread
Max reward = 29.42 or $2,942.00 per spread
Max risk = owning 100 shares at a cost basis of 390.58/share
Rolled down our short put in OXY:
Buy to close: OXY Aug 15th (monthly) 42.50 strike put
Sell to open: OXY Aug 15th (monthly) 40.00 strike put
Debit: 0.65
Rolled up our covered call in EQT:
Buy to close: EQT Aug 15th (monthly) 55.00 strike call
Sell to open: EQT Aug 15th (monthly) 60.00 strike call
Debit: 1.80
We will not be holding a live class next Monday but will continue to provide updates.
Our latest journal has been updated online.