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Top Trades for Tue, 15 Oct 2019 11:04 – MJ

phil
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Top Trades for Tue, 15 Oct 2019 11:04 – MJ
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Good morning!

Had a nice breakfast meeting, doing a $5M round for New Age to build 3 more facilities.  

Talking to VC's at the moment but if any private investors want to go through our MJ Hedge Fund – contact Greg at Philstockworld dot com and we can discuss in detail.

Speaking of which, it is time to restart our investment in the MJ ETF as some of the companies are starting to report profits and that can change things very rapidly value-wise.  This was a big loser for us in the last cycle but our plan was to DD when we started seeing profits so, now that we have clean portfolios, now is a good time to take a new poke.

I'm still not ready to go to an LTP but, in the STP, let's start with the following:

  • Sell 10 MJ 2022 $20 puts for $5.40 ($5,400)
  • Buy 30 MJ 2022 $15 calls for $7 ($21,000) 
  • Sell 30 MJ 2022 $30 calls for $2.20 ($6,600)
  • Sell 5 MJ Jan $20 calls for $1.65 ($825) 

That's net $8,175 on the $45,000 spread so there's $36,825 (450%) of upside potential at $30 but, even if we don't get to $30, we have  829 days to sell and we just sold 94 days for about 10% of our cost on just a 1/6th cover.  That's what I always liked about this ETF but we were too enthusiastic and failed to sell short-term calls, which is what really hurt us last cycle.  

See, that's already two trades for our new cycle – at this pace we'll be fully invested by March!  cheeky

 

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