Wow, $1.69 on /RB. Stop at $1.685 now.
GNC/Dave - The main reason I like GNC is there are lots of people who think it will go BK (driving up the short put pricing) and I see little chance of that happening. That being the case, I can construct a trade were I have little fear of the "worst case" (being assigned) and we can have fun with the leverage.
In the LTP, we sold 20 GNC 2020 $5 puts for $3 ($6,000) and now they are $2.10 ($4,200) and still good for a new trade and, in the LTP we will add:
- Buy 50 GNC 2020 $2.50 calls for $3.50 ($17,500)
- Sell 50 GNC 2020 $7.50 calls for $1.65 ($8,250)
That's net $9,250 on our new spread less $6,000 we collected is net $3,250 on the $25,000 spread that's half in the money already. Even taken with the puts at $4,200, the net is $5,050 with a $19,950 (395%) upside potential and the worst case is owning 2,000 shares for net $14,200 ($7.10) assuming you just sit there and watch the spread go to zero and never roll the puts.
In the OOP, we already have that spread at net $700 for 20 - even better than the LTP's price.
While it looks like a falling knife, MoviePass (HMNY) is probably just repricing to the stock offering and, in the OOP, we don't have them at all so let's play ball!
- Sell 15 HMNY 2020 $5 puts for $2.60 ($3,900)
- Buy 25 HMNY 2020 $2.50 calls at $3.25 ($8,125)
- Sell 25 HMNY 2020 $7.50 calls for $1.10 ($2,750)
That's net $1,475 on the $12,500 spread so potential to gain $11,025 at $7.50 (747%) and we're more than half in the money already! Aren't options great?
Worst case is owning 1,500 shares at net $6ish
In the LTP, we have 20 HMNY Aug $5/10 bull call spreads we paid net $1.50 for and we sold 10 Aug $7.50 puts for $3.50, which are now $3.70.
