Four for the Road: Time for my vacation but let's pick up 4 new stocks for the OOP and LTP as they can both use some new positions after a few cash-outs this month.
FNSR has missed out on most of the tech rally after disappointing earnings in March (through 1/30), where they missed by 4.8% but still made 0.59 and still on track to easily make $2 for the year, which is a p/e of 13.5 for a company that does fiber-optics and 3D sensors (for self-driving cars). Well worth a long-term investment though they may get cheaper in a tech crash.
In the LTP, our allocation blocks are $50,000 so no worries selling 10 2019 $25 puts for $4.80 ($4,800), which would net us in at $20.20 ($20,200) as an initial entry. We'll also play 20 of the 2019 $23 ($9.20)/30 ($5.90) bull call spreads at $3.30 ($6,600) and that will make the net of the whole $14,000 spread $1,800 with $12,200 (677%) upside potential.
I'll be very surprised if the Nasdaq doesn't pull back and we "only" make $12,200 - hopefully it gets cheaper and we can roll down the long calls and sell more puts.
Like the LTP, the OOP is swimming in CASH!!! (have I mentioned how much I like CASH!!! lately?) - $204,000 at the moment and our allocation blocks there are $25,000 so, essentially, we'll take half as big a position:
- Sell 5 FNSR 2019 $25 puts for $4.80 ($2,400)
- Buy 10 FNSR 2019 $23 calls for $9.20 ($9,200)
- Sell 10 FNSR 2019 $30 calls for $5.90 ($5,900)
That's net $900 on the $7,000 spread with $6,100 upside potential (677%) and the worst thing that can happen is we end up owning 500 shares of FNSR for net $25.90 - still cheaper than it is now.
