Only one trade this week.
music selection: “Opportunities” — Pet Shop Boys
I attempted two trades today that didn’t catch a bid. I tried a bear put spread in Ford (F) on the 11 and 12 strikes and 18OCT2019 expiry. I bid 95 cents and didn’t get a fill. I also tried a bull call spread in CubeSmart (CUBE) on the 25 and 30 strikes and 15NOV2019 expiry with a bid of 4.65 and could not get filled. I think I made fair offers for the spreads but today’s volatility might have scared off counter parties.
I did get a fill on a calendar spread for Proctor & Gamble (PG). I sold PG191018P00120000 for 3.20 a share and simultaneously bought (using a combo order) PG191115P00120000 for 4.3933 a share. My net debit is 1.1933 and the trade will be in force for about 46 days. If pricing for the underlying and all else remain the same, the long put will be worth 1.95 at expiry of the short put. That is good for 76% return over 46 days or 896% annualized.
I will probably be looking to make an early exit (for a loss) on my bear put spread in CONN. Shares popped today on good quarterly results and my puts are now out of the money. I will continue to hold a long dated long put in CONN as I think the long term story is negative. But I don’t have enough time on the spread to recover.
Wednesday is a tutorial on the Calendar Spread. Friday will include my write up on a distressed bond with a good till canceled order that filled today.
Devour your prey raptors!