Sorry for the incomplete idea. I already have a "monied" covered call where I bought shares at 16.50 and wrote a call against them at the 15 strike out until December for 3.50 Earnings is approaching July 26 before the bell, so on the weakness this morning I placed this trade for a .61 credit also out in December. I will want to take profit on the long put and let the other short puts expire worthless in a best case scenario. In a worst case I most likely will take profit on the long put and assignment on 1 lot and roll the other two short puts out in time and write another call against the lot I am assigned. We shall see......if it gaps down to 8 I may have to rethink that idea based on what the options premiums are. Wish me luck!
Trade active:
Today I "legged" out of my put ratio on the recent weakness for 2.55 credit added to the .61 credit for entering the trade gives me a total credit of 3.16 (about one buck per lot) This leaves me with 3 short puts at the 12.5 strike all the way until December and a basis on those of about 11.5 The buy/write 1 lot has a basis of 13 which is where we are today approx....... I am hoping by staying contrarian and getting more bullish into this drop will be rewarded later if the market returns to its bullish ways. Since the 15/12.5 put spread was only worth 2.50 max at expiration I feel this was a good choice but the call from the buy/write at the 15 strike is still holding too much value for some reason or I could adjust that down a bit. I will let things ride for now.
Comment:
I keep hoping price will rally so I can repurchase my 15 long put in December "Just In Case" things get wild. I sold it for 2.55 and can buy another today for 1.85 but after taking off most my other bullish trades will have to decide soon. The 15 long put is not all that much protection for the 3 short 12.5 puts so maybe I should not be greedy and just protect my trade. Talking through this has just helped me make up my mind.....so I will be buying it back. Poor fill at 1.85 oh well, better singles all day than swinging for the fences.
Comment:
I still have 2 short puts at 12.5 and collared with 10/7.5 put verticals (long) This semi related trade has done terrible but my basis is around 11.70 with all the defense I have been playing. With the stock now in the nine handle there is nothing to brag about for sure. Only hope left is a T tweet that China trade war is cancelled.
Comment:
Legged and took profit on the 10 long put in March today of 1.55 The reason for this thinking is that I can not even roll the short 12.5 puts as there is no extrinsic value unless you go a year out for 10-20 cents (not worth it in my opinion) This trade is now purely directional in nature. I will need to average down to defend this trade so I am leaving the short 7 puts and will take assignment in December and use call ratios on any pop. With the market selling off hard UCTT has been sitting at the same level so I am making the decision here to take off bearish protection trades into strength. The whole semi sector has been crushed but my attempt to play an outside smaller stock has failed and maybe I should have stuck with MU or some other more popular name? I may have lost just as much I am not sure.