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Sunday, November 24, 2024

Top Trades for Fri, 22 Jan 2021 10:43 – IBM

Good morning!

Wow, INTC went hard the other way, down 7% now.  IBM crushed down 11% so we have to move on that:

IBM Long Call 2023 20-JAN 110.00 CALL [IBM @ $117.70 $-13.96] 20 10/12/2020 (728) $50,000 $25.00 $-5.93 $25.00     $19.08 $-8.89 $-11,850 -23.7% $38,150
IBM Short Call 2023 20-JAN 125.00 CALL [IBM @ $117.70 $-13.96] -20 10/12/2020 (728) $-38,000 $19.00 $-6.35     $12.65 $-7.45 $12,700 33.4% $-25,300
IBM Short Put 2023 20-JAN 100.00 PUT [IBM @ $117.70 $-13.96] -10 10/12/2020 (728) $-11,750 $11.75 $2.00     $13.75 $3.85 $-2,000 -17.0% $-13,750

In the LTP, let's sell 10 more IBM 2023 $100 puts for $14 ($14,000) and let's use that money to buy back 1/2 (10) of the $125 calls ($13,000) and we will certainly roll our 10 2023 $110 calls at $19 to the 2023 $100 calls at $24 for net $5 ($10,000).  So for net $9,000 we've rolled $20,000 deeper into the money (keeping up with the drop) and widened our spread by $20,000 and removed 1/2 the covers and we still have an open slot to sell 10 (for example) April $120s, now $5 ($5,000), which were $13 yesterday and if we make just 2 sales like that we pay for the whole adjustment.  

Not that IBM can't go lower but I'm worried it won't and we'll miss it.  

INTC Short Put 2022 21-JAN 30.00 PUT [INTC @ $58.61 $-3.85] -10 3/12/2020 (364) $-3,000 $3.00 $-2.33 $7.00     $0.67 $0.07 $2,330 77.7% $-670
INTC Short Put 2022 21-JAN 50.00 PUT [INTC @ $58.61 $-3.85] -20 7/24/2020 (364) $-17,000 $8.50 $-4.13     $4.38 $0.78 $8,250 48.5% $-8,750
INTC Long Call 2023 20-JAN 35.00 CALL [INTC @ $58.61 $-3.85] 50 11/17/2020 (728) $67,000 $13.40 $11.85     $25.25 $-3.75 $59,250 88.4% $126,250
INTC Short Call 2023 20-JAN 50.00 CALL [INTC @ $58.61 $-3.85] -50 11/17/2020 (728) $-31,250 $6.25 $7.95     $14.20 $-3.30 $-39,750 -127.2% $-71,000

The problem here is we had such a good entry that this doesn't really affect us.  

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