Trade Findings and Adjustments 06-03-2020
What is the new narrative today?
Why have I been trading options the way I have for the past year or more?
During a historic bull run why the heck would you cap yourself to the upside
BUT Kevin You’re rarely if ever in the indexes = 83% of stocks follow the index
F, BIDU, BA
My ideal trade is collar trade, get called out and then convert the profits to leap long call replacement strategy = Protects initial investment capital
JPM – 400 shares @ 98.59
Short call on 300 shares for $3.22 credit obligated to sell at $120
Profit would equal 120-98.59+3.22 = $24.63 per share
Current puts = 24.63 – 4.40 + 1.78 = overall profit of $22.01
I would buy the $115 Jan 22 Leap long calls for $11.05 = 6 contracts costing me $0.045 per contract for 597 days
So why don’t you use more long puts against the leaps?
IF I added long puts it wold have cost me $4.40 or 40% of the cost basis on my leap
I personally would rather spend that money on dollar cost averaging
11 + 4.40 = 15.40 / 2 = $7.90
Leap Long Call Jan 22 $260 Strike for $31.50