Good morning!
We blew over 3,333 (/ES) but that will make it a better short on the way back down - if we do go back down. Russell if flying at the 2.5% line (1,505) so we'll see how that goes.
We discussed PFE in the Morning Report: The Week Ahead – 3,350 is Critical for the S&P 500
Let's add PFE officially to the LTP as it's a solid entry:
- Sell 15 PFE 2023 $35 puts for $6.60 ($9,900)
- Buy 50 PFE 2023 $30 calls for $8 ($40,000)
- Sell 50 PFE 2023 $37 calls for $4.60 ($23,000)
That's net $8,000 on the $35,000 spread so our upside potential is $27,000 (337%) and our worst-case scenario is owning 5,000 shares at $35, which I doubt will be a bad thing.
We will, of course, sell some short calls, like 10 Nov $37 calls at $1.45 would use up 53 of our 844 days so not even 10% and if we collect $1,450 10 times, that's $14,500, adding 50% to our potential profits - but we'll only sell when we feel PFE is toppy - and it isn't at the moment.
On the Big Chart, watch the NYSE and the 200 dma at 12,372 - safe for now at 12,686 on today's 200-point pop. Otherwise, we'll see if we can get back over and hold those 50 dma lines but all are being death-crossed by the 20 dmas - there's no stopping that from happening.
T/Millard - We love T when it's cheap and $28 is cheap. T is already in the LTP and the same position is still good (because it's cheaper now):
| T Long Call | 2022 21-JAN 28.00 CALL [T @ $28.04 $0.00] | 75 | 9/3/2020 | (480) | $25,500 | $3.40 | $-1.06 | $3.40 | $2.34 | $0.00 | $-7,950 | -31.2% | $17,550 | ||
| T Short Call | 2022 21-JAN 33.00 CALL [T @ $28.04 $0.00] | -75 | 9/3/2020 | (480) | $-10,500 | $1.40 | $-0.54 | $0.87 | $0.00 | $4,013 | 38.2% | $-6,488 | |||
| T Short Put | 2022 21-JAN 28.00 PUT [T @ $28.04 $0.00] | -25 | 9/3/2020 | (480) | $-8,125 | $3.25 | $0.50 | $3.75 | $0.00 | $-1,250 | -15.4% | $-9,375 |
BRK.B/Stuart
