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!