Two trades this afternoon.
music selection: “You Got It All” — The Jets
First up, I opened a bull call spread in Docusign (DOCU) on 16FEB2021 using the 240/250 strikes and 19MAR2021 expiry. I got 4.40 pricing on 9 spreads, putting 3,960 in capital at risk. At the time, DOCU was in a strong uptrend and everything about COVID seemed to indicate the trend would hold. Shares have however broken strongly to the downside putting me far out of the money with just 16 days left to trade. I decided to preserve capital and close early for a loss. I got 2.22 pricing and booked a 1,962 loss over 52 days. A position at the same expiry is threatened but hasn’t breached my 50% stop loss target yet so I’m holding for a few more days to see if the market will rally.
A month or so ago, I opened a “fishhook” trade in Match Group (MTCH). Which is to say I put in a good till canceled stink bid on the 145/150 strikes bull call spread with 18JUN2021 expiry. I filled today at 2.40. The trade will be in force for about 107 days and needs 1.53% gain to return the maximum profit. This is a great company that is now very attractively priced. Even though my high strike is out of the money, my low strike is far enough into the money that if the spread expired today it would generate 680 in profits across 20 spreads (4,800 in capital at risk.) The full profit would be good for 108.3% over 108 days or 366% annualized. I feel good about my chances.
Devour your prey raptors!