Opened a bull spread in ITB.

music selection:  “Silvia” — Focus

weigh-in:  185.8 (n/c)

Three positions expired in the money over the weekend.  I booked 4,560 in profit on FB (92.3% over 54 days or 624% annualized.  SPGI returned 3,080 (62.6% over 54 days or 423% annualized).  And finally, ACN saw profit of 2,775 (58.7% over 40 days or 536% annualized.)

This week’s spread is a bullish one in the home builder’s index (ITB).  Housing is on  a tear and I like this chart for a short term bullish play.  With shares trading at 71.33, I bought the 65/70 strikes bull call spread with 17SEP2021 expiry for 4.15 a share.  The trade will be in force for 26 days and enjoys 3.06% downside protection to break even.  Should the spread finish in the money, the full profit of 1,020 will be earned on the 4,980 of capital at risk.  That is good for a 20.5% return or 288% annualized.

Ordinarily, on the 2nd or 4th Monday, I will have an extra spread (recommended by Stansberry Research).  The current recommendation today was in an oil company.  Dr. Eifrig made a compelling long thesis for oil.  But for my risk tolerance, I’m not making a commodity bet in this market so I passed on the trade.

Unless, I close something extracurricular the month will see P&L from trading activity of 10,388.  All of my September expiring spreads are in the money and if that continues, I will book 12,146 in profit for the month.  That is across 6 spreads, 5 bullish and one bearish.

Devour your prey raptors!

Bull Call Spread ITB with yield up to 288%

Never miss another opportunity to devour prey!

One thought on “Bull Call Spread ITB with yield up to 288%

  • August 24, 2021 at 4:16 pm

    The home builders index is getting a boost from the bursting of the lumber bubble. Prices are down 70+%, which means more profit for unhedged home builders. So in a sense you are investing in commodities. 🙂


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