ETM/Scott – I'm surprised that business does well these days. Sometimes the regular radio goes on in the car and the kids scream "Ewwww!" I guess they sold off to the right price with a p/e of 5 – sounds like a good call to me and even better as they have good options prices.
We could use another dividend payer in the LTP so let's grab 2,000 shares of ETM at $7.65 ($15,300) and sell 20 of the 2020 $8 calls for $1.50 ($3,000) and 20 of the 2020 $8 puts at $1.90 ($3,800) to net in for $4.25 ($8,500) with an obligation to buy 2,000 more shares at $8 ($16,000) which would put us in for an average of $6.13 on 4,000 shares ($24,520) – so still a 1/2 allocation, worst case.
Meanwhile, we'll collect $720/yr (8.47%) in dividends against our $8,500 initial entry while we wait to see if we get called away with a $3.75 (88%) gain at $8 so 105% total potential return in 20 months on this "boring" dividend play!
Fortnite/Atitlan – My kids play it and I play it too, sometimes. It's actually a fun family activity, slaughtering villages together… I spent $25 on a cool dragon glider and armor!
Actually not $25, I got like 10,000 tokens for $25 and spent some on those items – but they still got my $25! It's funny as there's another game called PUBG (Player Unknown, BattleGrounds) that came first and the actual combat is better/more realistic but the Fortnite guys made it simpler to play and monetized it way better (celebrity endorsements were key to rocketing them higher).
THO/Ayyaps – They are basically a car company and gas is way high and they guzzle so I can see why they sold off. Now ($100) they are priced right as they make about $9/share and it makes for a good, solid, long-term hold as there is little competition and huge barriers to entry (though I'm sure Musk will announce one soon).
THO has the best options of the group and nice premiums due to the volatility but $100/share means you have to be careful and don't sell puts unless you REALLY want to own them because they were $50 two years ago so $100 is still 2x (but justified with revenues and earnings so far). As a trade on them I'd sell 5 2020 $85 puts for $11 ($5,500) and buy 10 of the 2020 $90 ($24.50)/$115 ($15.60) bull call spreads for net $8.90 ($8,900) to net into the $25,000 spread for just $4,400. You could then work off the $4,400 by selling (not yet) 2 or 3 of the July $120 calls (now $1.50) for the price of the $105 calls ($5) on a $15 move back up – I think that's likely.
You're welcome, StJ.
