Trade Alert 9/1/2023

A few changes to the portfolio today. First, we took profits on our recently entered covered call in Target (TGT) and replaced it with short puts. This locks-in some profit and gives us a little different look. Sold: TGT 100 shares at 127.06 Buy to close: TGT Sep 15th (monthly) 130.00 strike call for 1.00 debit The net credit was 126.06 price. The result is a profit of +$341.00 We entered into a short put to replace this trade. Sold to open: TGT Sep 15th (monthly) 122.00 strike put Credit: 0.50 Max reward = 0.50 or $50.00 Max risk = owning 100 shares at 121.50 cost basis We have a covered call position in DELL that has blown out on the upside today. This is a worst case scenario with covered calls. While we are making money overall. We are losing out on a good portion of the upside. Given the big drop in HPQ earlier this week, a massive higher in DELL (a competitor) was not expected. For now, we will work to recover by selling puts to replace our stock set to be “called away” at September expiration. This adjustment does add risk if the stock were to collapse back down by Sep 15th, a risk we don’t see as likely. A fairly good sized move down to the 65.00 strike price would be a welcome sight! First, we are rolling up our covered calls to improve our position slightly (+0.50 per share benefit overall if we finish above 65/share) Bought to close: DELL Sep 15th (monthly) 55.00 strike calls Sold to open: DELL Sep 15th (monthly) 65.00 strike calls Debit: 9.50 Second, we are selling puts. This runs the risk of doubling our position size on a move below 65/share. So, if unwilling to own more shares, this is not the ideal adjustment. Assuming we finish above 65/share on Sep 15th, this adds +0.50 of benefit. Sold to open: DELL Sep 15th (monthly) 65.00 strike put Credit: 0.50