CHWY Defensive Bullish inclined - 18 Sep Expiry
CHWY is an online retailer of pet food. Since the start of the year is has generally been on a bullish uptrend. I picked CHWY as it's price movement seems pretty predictable and not very volatile.
Price has recently hit a nice high 52 week high and now seems to be in a range and testing that key 52 week high price point. I feel that there is a higher probability of it moving downwards, especially with it's RSI leaning towards the higher band of 60.
As my defensive trade is focused on picking off premium. As such I have made it bullish inclined with a Max gain at strike 70 and breakeven at 71.23. So the scenario I aim for is a bearish price that so that my contracts can just expiry worthless.
I'm worried as Tradingview has pegged earnings at 21 Sep, but other sources has it at 8 Sep/15 Sep. I only realised this after the trade was entered and TOS showed a different earnings date.
Defensive Profit $1333
Bought 18 Sep @ Strike 60 Calls +1, $2.7
Sold 18 Sep @ Strick 70 Calls -20, $0.81
BP block: 12k
Price has recently hit a nice high 52 week high and now seems to be in a range and testing that key 52 week high price point. I feel that there is a higher probability of it moving downwards, especially with it's RSI leaning towards the higher band of 60.
As my defensive trade is focused on picking off premium. As such I have made it bullish inclined with a Max gain at strike 70 and breakeven at 71.23. So the scenario I aim for is a bearish price that so that my contracts can just expiry worthless.
I'm worried as Tradingview has pegged earnings at 21 Sep, but other sources has it at 8 Sep/15 Sep. I only realised this after the trade was entered and TOS showed a different earnings date.
Defensive Profit $1333
Bought 18 Sep @ Strike 60 Calls +1, $2.7
Sold 18 Sep @ Strick 70 Calls -20, $0.81
BP block: 12k
Trade closed: target reached:
Closed with a sweet profit of USD 1316.35. I need to relook my trade structure as my covering position does not make up for volatility spikes and if the price goes past the strike.
Comment:
Also CHWY is one of those COVID19 stocks that the public is very bullish and as such I should not include it in my future low volatility trades