We discussed HELE last week and today we're pulling the trigger:
HELE, on the other hand, I want:
In the $700/Month Portfolio, lets:
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- Buy 5 HELE 2027 $15 calls for $10 ($5,000)
- Sell 5 HELE 2027 $22.50 calls for $8 ($4,000)
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That’s net $1,000 on the $3,750 trade with $2,750 (275%) upside potential and we’re starting out $2,315 (131.5%) in the money. I don’t see any point in doing anything risky when the spread gives such a nice return.
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- In the STP, we can sell 10 of the HELE 2027 $22.50 puts for $7.50 ($7,500).
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That puts us in for net $15 and that’s great.
And, for the LTP we can get fancier:
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- Sell 20 HELE 2027 $22.50 puts for $7.50 ($15,000)
- Buy 50 HELE 2028 $15 calls at $10 ($50,000)
- Sell 40 HELE 2028 $22.50 calls at $8 ($32,000)
- Sell 10 HELE Jan $20 calls for $3.20 ($3,200)
- Sell 10 HELE Jan $20 puts for $3.50 ($3,500)
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That’s a net $3,700 CREDIT on the $37,500+ spread, so that’s $41,200 (1,113%) of upside potential AND we’ve got 8 more Qs to sell $6,500 ($52,000 – 1,405%), which is more than we’ll make on the spread. What a great trade!
