HBI/Batman - Glad you pointed them out as they got cheap enough to add back to the LTP:
- Sell 20 HBI 2023 $17 puts for $3.10 ($6,200)
- Buy 40 HBI 2023 $15 calls for $4.50 ($18,000)
- Sell 40 HBI 2023 $20 calls for $2.25 ($9,000)
That's net $2,800 on the $20,000 spread that's $12,000 in the money to start (aren't options fun?). Upside potential at $20 in 18 months is $17,200 (614%) and worst case is we own 2,000 shares at $17 ($34,000) + $2,800 if we lose that so $36,800/2,000 = $18.40/share - around the current price - so this is considered aggressive but not really as the LTP has $100,000 allocation blocks and this would only be a 1/3 entry.
Let's say HBI drops to $8 in some disaster - we could spend $16,000 more and our basis would be $13.20 and then we could sell $15 LEAPS for $3 and that's $10.20 and sell some $8 puts for maybe $1.50 and the net becomes $8.70 on 4,000 shares and that's STILL $34,800 with the obligation to buy 4,000 more at $8 ($32,000) and we'd be in 8,000 shares at an average of $8.35 for $64,800 - STILL barely over half an allocation block!
So, if you don't REALLY want to own 8,000 shares of HBI at $8.35, don't sell 20 $17 puts for $3.10 but, if you consider that a position you WISH you could get - then this whole trade is a no-brainer.
TOS/Rperi - Wow, that would be great! A lot of us have been very vocal with TD about how much better TOS is - I guess they finally agreed.
