Bought a bull call spread in EL.

music selection:  “The Devil In I” — Slipknot

What a difference a day makes.  PF twitter and Facebook was full of moaning and gnashing of teeth yesterday over some normal volatility.  I held off on my normal Monday trade in case it was the start of an extended downtrend.  This morning, we have a strong reversion to mean and I’m back to trading long.

With Estee Lauder (EL) showing strong profits and in a good uptrend, I have chosen it for an in the money bull call spread.  With shares trading at 322.07, I bought the 310/320 BCS for 6.5486 per share (7 spreads).  I am putting 4,584 in capital at risk for 32 days.  I currently have 1.71% downside protection to break even.  If the price holds, I will earn the full profit of 2,416, which is good for 52.7% over 32 days or 601% annualized.

Trades in FB and SPOT are currently still threatened, while three plays that were underwater at yesterday’s close are all now fully back in the money.  If July expiry were today, I would be on pace to book 3,331 in short term gains on the month.

Devour your prey raptors!

Estee Lauder (EL) Spread with yield up to 601%

Never miss another opportunity to devour prey!

2 thoughts on “Estee Lauder (EL) Spread with yield up to 601%

  • July 20, 2021 at 4:23 pm
    Permalink

    Days like yesterday and today make it hard to capitulate. The Cintas decision must be painful now. Still gotta do it I guess!

    I bought a few thousand bucks worth of UPRO yesterday, on the rationale that rising COVID cases is the one thing the stock market does NOT care about, especially since there’s zero political will for more lockdowns, and it reduces the risk of inflation anyway. Wasn’t the market just last week in a tizzy about inflation? That purchase is up 5% today.

    My order to buy 4 vix bear put spreads at 26/27 failed to execute at the midpoint of 80 cents and now the mid is 85 cents. I’ll pass.

    Reply
    • July 20, 2021 at 7:29 pm
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      Cintas was a little different. It tanked on strong earnings on an up day in the market. Thesis was clearly borked. I didn’t close anything yesterday, expecting reversion to mean this morning. Too bad about the vix spread not catching a bid. Sometimes (oftentimes!) the best trade you can make is NO TRADE however. Don’t second guess that. Risk management is essential.

      Reply

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