Multiple trades this week.
music selection: “Stealin'” Uriah Heep
weigh-in: 211.6 (0.4) – seven consecutive weeks of weight loss!
First a closed trade. On 4MAR2021, entered into a bull call spread on Microsoft (MSFT) at the 225/230 strikes and 18JUN2021 expiry. I had a stink bid open for some time that finally filled at 2.50 a share on 20 contracts. I had 5,000 dollars at risk in the trade. The spread had moved well into the money and there was less than a penny per day to earned by holding till expiry. I decided to book a profit early and take some risk off the table. I sold for 4.355 per share, earning 3,710 in profit over 40 days. That is good for 74.2% return or 677% annualized.
I opened a new bull call spread in Lennar (LEN). LEN is America’s largest home builder and they are hitting on all cylinders. The company has a multi billion dollar construction backlog that is growing as the economy recovers, interest rates stay low, and Millennials move into their prime earning years. With the underlying trading at 104.73, I bought the 100/105 strikes bull spread with 21MAY2021 expiry for 2.95 per share on 16 contracts. I have 4,720 in capital at risk in the trade for up to 40 days. I need prices to move up by 54 cents in that time to earn the full profit of 3,280 which is 69.5% or 634% annualized. At the current price of 104.46, the spread would be good for a 2,416 profit if it expired today (51.2% and 467% annualized.) Break even would be at 102.95 or 1.45% below the spot price.
My bull call spread in DBC expiring this Friday is threatened, with the upper strike out of the money. Had it expired today, it would have been good for a profit of 1,280. I have a good till canceled order open to close early if I can get my price. I’d rather give up some upside in exchange for taking risk off the table.
Using today’s closing prices, my mark to market profits for April, plus closed positions are pacing for $9,030 in profits for the period.
Devour your prey raptors!