Wow, we almost went through February without a Top Trade Idea!
OWL is interesting as they lend money to SaaS companies so now people are worried those companies will default but it's panic upon panic upon panic so rational-minded trades like us get to take advantage - but still cautiously - just in case...
From today's Live Member Chat Room:
Speaking of Blue Owl though, for the $700/Month Portfolio, let's:
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- Buy 10 OWL 2028 $10 calls for $3.10 ($3,100)
- Sell 5 OWL 2027 $10 calls for $2.35 ($1,175)
- Sell 3 OWL May $11 calls for $1.10 ($330)
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That's net $1,595 and we'll assume we can roll the short calls to 2028 $13s (now $2.40) so let's call it a $3,000 spread and we sold $330 in premium using 81 days out of 697 so 7 more sales like that is $2,310 so potential to make that (144%) and $1,405 (88%) on the spread at $13 is a very good rate of return for a no-margin trade.
For the LTP we WOULD like that dividend income (0.92 - 8.7%) so we'll aggressively sell short puts as we'd LOVE to get assigned but we're also not crazy so we're selling an amount we'd be very happy to double down on:
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- Sell 50 OWL 2028 $10 puts for $2.90 ($14,500)
- Buy 100 OWL 2028 $8 calls for $3.80 ($38,000)
- Sell 75 OWL 2027 $13 calls for $1.30 ($9,750)
- Sell 30 OWL May $11 calls for $1.10 ($3,300)
- Sell 20 OWL May $10 puts for $1.10 ($2,200)
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That's net $8,250 on the $50,000 spread and here we're selling $5,500 x 7 is a bonus $38,500 of potential premium income. It's so much fun when other people panic!
🚢 I’d be comfortable planting a flag in OWL, with the caveat that this is a fee‑stream compounder, NOT a rocket ship, and the current drawdown is about sentiment and governance optics, not a broken model.seekingalpha+2
