PhilStockWorld Top Trade Alert – Sept 2 2022 – THC and JPM

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    THC Daily Chart - Sept 2 2022

    I think we stopped at IMAX yesterday on our short-term Watch List and that brings us to THC, where we do have 10 short puts in the LTP (2024 $65 puts sold for $19.40 on 7/7, now $15.70. That still seems fine to me – it’s an aggressive sale as THC is $57 but that is STUPIDLY low and it’s still net $49.30 – nothing wrong with that as a new entry.

      • In the LTP, let’s add a bull call spread, 20 of the 2024 $50 ($18.25)/70 ($10) bull call spreads at $8.25 ($16,500) and that will net us in for a CREDIT of $2,900 on the $40,000 spread that’s $14,000 in the money (not the puts) to start. Of course we’ll roll the puts but the worst case is owning 1,000 shares at net $62.10 – 10% over the current price.

    And our last Watch List stock was JPM, which is in the LTP with 50 June 2024 $110 calls and 25 short 2024 $135 calls and 25 short 2024 $140 calls and 20 2024 short calls at $110 avg. The whole thing is nicely ahead but, as a new position, I would:

        • Sell 10 JPM June 2024 $100 puts for $10 ($10,000)
        • Buy 20 JPM June 2024 $120 calls for $16.50 ($33,000)
        • Sell 20 JPM June 2024 $140 calls for $9 ($18,000)

    That’s net $5,000 on the $40,000 spread and of course we’d love to roll down to the $110 calls (now $21.50) for $3.50 if we get that chance. That would be another $7,000 and then net $12,000 on the $60,000 spread and the upside potential would go from $35,000 (700%) to $48,000 (400%).

    The Jan $130s are $3.20 so selling 5 brings in $1,600 while you wait. If JPM stays flat, maybe 3 more sales and that’s $6,400 paying for most of the roll lower (or out to 2025s).