I’ll be playing Becton Dickson (BDX) this week.
music selection: “I Can’t Wait” — Nu Shooz
weigh-in: 213.8 (1.2) – not bad for Turkey Week
No trades expired over the weekend. I also have a bonus trade this week of a long put in Cheesecake Factory (CAKE). I made 1,372 in profit the last time I made this trade. The thesis is the same. CAKE is reliant heavily on mall traffic. If the retail apocalypse weren’t enough, COVID has hammered mall traffic in a way it might never return. The restaurant chain is also heavily indebted. I bought the 35 strike 21JAN2022 expiry put for 7.70 a share. I need the price to fall about 6% to move into the money.
I also have bull call spreads in NVO, AMZN, and PYPL that I will not be detailing here. These trades were recommended behind a paywall at Stansberry and I don’t feel it is fair to give paid advice away. I’ll include the P&L results when the trade closes including in my monthly Transparency.
This week’s main trade is in Becton Dickson (BDX) the medical supplies provider. The company is a Dividend Aristocrat with 48 consecutive years of distribution increases. It is a mature company with a slow moving equity price. It is perfect for an in the money spread with a short time horizon. With shares around 228, I bought the 240/250 bear put spread with 18DEC2020 expiry for 8.40 a share. I picked up 4 spreads putting 3,360 in capital at risk. The trade enjoys 4.87% protection against an upward move in price over the 47 days in force. Should the protection not be breached, I will earn 640 dollars or 19% over the 47 days. That comes out to 366% annualized.
Devour your prey raptors!