I bought 8 spreads in HD.
music selection: “The One You Love” — Glenn Frey
weigh-in: 209.0 (0.8) – 9 consecutive weeks of progress.
This week’s main trade is bullish. Not super bullish, I’m still near/in the money with 1.48% downside protection to break even. I bought bull call spreads in Home Depot (HD). There is a house building boom, as well as a home office renovation boom due to COVID-19. The oldest members of the Millennial cohort are starting to move into management positions and seeing some career success after late starts. And with work from home the near reality for degreed professionals, they are increasing turning to the suburbs instead of the inner city apartment living they previously preferred. This has spelled a strong tailwind for HD.
With shares trading at 330.94, I bought the 220/230 bull call spread with 18JUN2021 expiry for 6.1125 dollars per share. The trade will be in force for about 47 days and has 0.28% downside protection before profit is threatened. I don’t think I’ll need it thought as the trend in the stock is strongly in my favor. I have 4,890 in capital at risk in the trade. Should downside protection not be breached, I will earn the maximum profit of 3,110 on the trade. That is good for 63.6% or 494% annualized.
Devour your prey raptors!