See this morning's post for my thought process in getting to our Trade of the Year selection (along with more bonus Trade Ideas):

OK, having given it some thought, I would like to play our 2018 Trade of the Year OFFICIALLY as such:

In the OOP let's:

• Sell 15 HBI 2020 $20 puts for $3.50 ($5,250) 
• Buy 25 HBI 2020 $18 calls for $4 ($10,000) 
• Sell 25 HBI 2020 $23 calls for $2 ($5,000) 

That's a net credit of $250 and, if all goes well and we're over $23 in 2020, we'll collect $12,500 more so $12,750 profit potential is 5,100% (it's tricky with credits).  

In the LTP, we're going to simply do double that much so:

• Sell 30 HBI 2020 $20 puts for $3.50 ($10,500) 
• Buy 50 HBI 2020 $18 calls for $4 ($20,000) 
• Sell 50 HBI 2020 $23 calls for $2 ($10,000) 

That one gives us a bigger net credit ($500) and a payoff of another $25,000 if all goes well and, with HBI already at $19.75, we're only looking for 8% a year to make our 5,100% - now that's leverage!  

Also from the morning post - we already have M but, as a new trade, I like:

• Sell 15 M 2020 $20 puts for $4.65 ($6,975)
• Buy 30 M 2020 $18 calls for $5.75 ($17,250) 
• Sell 30 M 2020 $25 calls for $3.12 ($9,360) 

That's net $915 on the $21,000 spread so upside potential is $20,085 (2,195%) if M can gain about 15% over 2 years.  Worst case is you own $30,000 worth of it at $20.46, which is still a buck below where it is now so figure the risk is stopping out with a $5,000 loss (400%) vs the reward of $20,000 and you are $7,500 in the money to start.  

GE is the other one I strongly believe in and that's another one we own but no longer worth owning the stock with the cut dividend so a new play would be:

• Sell 30 GE 2020 $20 puts for $3.60 ($10,800) 
• Buy 40 GE 2020 $15 calls for $4.70 ($18,800)
• Sell 40 GE 2020 $22 calls for $1.60 ($6,400) 

Here we're netting in for $1,600 on the $28,000 spread and it's an aggressive put sale with GE at $18.35 at the moment - so be careful with that but my thought is GE is not a BK risk, so the downside risk of ownership is far less than most stocks.  

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