Buying a Bull Call Spread in CHD.

music selection:  “Va-T’en Pas” — France D’amour

weigh-in:  220.4 (1.0)

Right on schedule, I’m making another trade Monday morning.  This time, it is a bullish trade in Church and Dwight (CHD), the maker of such household staples as Arm & Hammer products.  The company steadily grows sales a little less than 2% a year and has done so for decades.  This is a defensive move with the election coming up.

With shares trading at 93.63 I went into the money for the 85/90 strikes bull call spread with 20NOV2020 expiry.  The trade will be in force for about 54 days.  I got 3.80 pricing on five spreads putting 1,900 in capital at risk.  Should shares fall no more than 3.88% by expiry, I will earn the full profit of 600 dollars.  That is good for 32% or 213% annualized.

Soft hands should pile into names like CHD as the election approaches to preserve capital so I expect to earn the full profit here.

Devour your prey raptors!

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Church and Dwight spread with yield up to 213%

Never miss another opportunity to devour prey!

2 thoughts on “Church and Dwight spread with yield up to 213%

  • September 30, 2020 at 6:27 pm
    Permalink

    Looking good so far, but I wonder what justifies a 32+ PE ratio for a consumer staples stock? That’s more expensive than Facebook.

    Reply
    • September 30, 2020 at 7:40 pm
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      The stock with distribution’s total return has averaged around 17% annually for a long time.

      Reply

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