I made three trades this morning.

music selection:  “Mr. Tinkertrain” — Ozzy Ozborne

I decided to put a 1,000 to work in the GameStop (GME) circus.  The short interest has fallen dramatically and the shares are starting to retreat.  With the underlying a little over 100, I bought 10 April puts with the 10 strike for 1.05 a share.  I need shares to fall over 90% to earn a profit.  But I think once the squeeze is over, shares have an intrinsic value around $3.25.  That would give my puts a 543% return.

I’ve held shares of Colony Capital (CLNY) for several months.  This is a 5G play with a twist.  They specialize in the “edge” of the cloud, putting processing power on or near the towers.  For many applications, reaction time matters and it doesn’t pay to send a signal from New York to Seattle and back.  The CEO is a veteran of the tower wars who put some of the original cell equipment on top of downtown buildings at the start of the race. I sold covered calls at the 5.5 strike and 19MAR2021 expiry for 20 cents a share.  The trade will be in force for 45 days and yields an expected 29.49%.

Finally, I had a deep in the money call on Intel (INTC).  Ex-div date is tomorrow and the distribution is more than my remaining time value.  I have some nice price appreciation, so I exercised my call and now own 100 shares.  I’ll sell on the fifth for a tidy profit.

Devour your prey raptors!

Three trades

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2 thoughts on “Three trades

  • February 4, 2021 at 9:22 pm
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    I couldn’t resist GME either. I bet a late model Civic on the $70 puts. Thought long and hard about YOLOing it, because this bet seems so obvious. But this way I regret it one way or another.

    Reply
    • February 4, 2021 at 10:06 pm
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      [Wall Street Bets mode ON] Way to go. Major stones bro! Meme stonks FTW. [Wall Street bets mode OFF]

      $1,000 here or there every month on long puts is already part of my strategy. This wasn’t a hard decision for me to justify. Good luck. Go shorts!

      Reply

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