Bought a bull spread in ACN.
music selection: “What You Want” — Evanescence
weigh-in: 195.8 (2.8)
Accenture (ACN) is what remains of Arther Anderson audit and consulting after losing its audit license in the Enron fiasco. The firm is capital efficient and spits out high margins and Free Cash Flow. It has been in a strong uptrend for months. I’m trading this on a “the trend is your friend” thesis.
With shares trading at 311.61, I bought the 305/310 bull call spread with 20AUG2021 expiry for 3.15 per share (15 spreads). I put 4,725 in capital at risk over 40 days. The trade enjoys 1.11% downside protection. Should the price hold or grow over the next 40 days, I will earn the full profit of 2,775, which is 58.7% or 536% annualized.
I like my chances here.
My spread in ITB is threatened (expiring this Friday). The 70 strike is 2.56% out of the money. That gives the spread an expected value of a 30 dollar loss. I need two cents in price appreciation to break even. I need 1.75 to earn the full profit. If today were expiry, my net gains for the month would be 10,460. I expect a good month. All spreads expiring in August and September are in the money.
Devour your prey raptors!