I have trades to detail.
music selection: “If I Can’t Have You” — Yvonne Elliman
weigh-in: 221.6 +0.2 (after 6 months hiatus I have finally joined a new gym)
First closed trades. I had a bull call spread in CHWY going into earnings. I expected a beat and got it. CHWY blew out the quarter. Market apparently was pricing in an even bigger beat as shares sold off almost 10% on the news. The stock closed below my 50% stop loss so I exited this morning. I took a 1,010 loss on 2,000 capital at risk over 7 days.
My Annaly (NLY) covered calls finished in the money and shares were called away. I booked 2,700 in short term capital gains on the sale.
I am back in NLY with short puts at the 7 strike. I sold 37 contracts on the 16OCT2020 expiry for 14 cents a share. I have over 5% downside protection in the trade and it is expected to earn 22.12% annualized over 33 days.
I also expanded some of the NLY exposure by getting into Hannon Armstrong (HASI). This is a company that lends money to companies and utilities for energy conservation and/or green generation capacity. Most of their loans actually improve the borrower’s credit worthiness due to net savings. I think the stock is a good long term buy and hold but right now it is a better short term options play. I sold 6 contracts of the 40 strike put and 16OCT2020 expiry for 1.90 a share. They trade will be in force for 33 days and yields an expected 52.54% annualized.
I also opened an in the money bull call spread on Coca-Cola (KO). I won’t introduce KO as I think every investor already knows its story. With shares at 51.06, I bought the 47.5/50 strike BCS with 16OCT2020 expiry. I paid 1.67 a share net debit for each spread. Should shares fall less than 2.08% by expiry I collect the maximum profit of 83 cents a share. That would be good for 996 dollars profit and a 50% return over 33 days or 267% annualized. I like my chances with downside protection on a solid name.
Devour your prey raptors!