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Friday, May 3, 2024

Top Trades for Mon, 01 Nov 2021 12:08 – IBM and INTC

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Top Trades for Mon, 01 Nov 2021 12:08 – IBM and INTC
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STP is still at $110,127 but LTP is up about $50,000 at $2,184,005 and we're swimming in CASH!!! ($1,770,548) so yes, let's add IBM and INTC to the LTP (and I'm open to other suggestions):

IBM – We wanted to sell the 2024 $125 puts for $25 but they are only $22.50 so far.  Still, the target is right – I was just wrong about the price of the options as the VIX has improved so much.  No harm in moving up to the $130s as I'd rather have my $2,500 than worry about paying $5 more for IBM and net $105 is still very nice, so:

  • Sell 10 IBM 2024 $130 puts for $25 ($25,000) 
  • Buy 30 IBM 2024 $125 calls for $13.30 ($39,900)
  • Sell 30 IBM 2024 $150 calls for $6.50 ($19,500) 

That's a net $4,600 credit on the $75,000 spread that's at the money to start so, at $126, we make $3,000 on the calls and lose $4,000 on the puts, so that's about the break even and worst case is we end up owning 1,000 shares of IBM for about net $123.50.  Upside potential at $150 is a lovely $79,600 (1,730%) and plenty of room to adjust or even sell short calls along the way.

INTC has also made a good bottom so, also for the LTP, let's:

  • Sell 20 2024 $45 puts for $6.25 ($12,500)
  • Buy 40 2024 $40 calls for $13.($52,000) 
  • Sell 40 2024 $55 calls for $6 ($24,000) 

That's net $15,500 on the $60,000 spread so only $44,500 (287%) upside but it's 2/3 in the money to start so I'm very comfortable with this "risk".