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A Week Of Wins (And One Loss)
Overall, a profitable week as we made money on a stock that went up and two stocks that went down. Details below.
Profiting From A Rising Homebuilder
Discussion with subscribers wary of holding long options positions for too long prompted me to set Good ‘Till Canceled limit orders to exit mine. One of those limit orders I set was on call options on Taylor Morrison Home Corporation ( TMHC 0.00%↑ ), the homebuilder I wrote about here last month:
In that post, I mentioned I had bought the $45 strike, October expiration calls on it at $1.55. I exited them today at $3.50 for a gain of $126%. I probably should have been more patient and greedier with this one as the stock is fundamentally and technically solid. I’ll keep an eye on it for another entry opportunity in the future.
In actual dollars, I spent $310 on 2 put options on TMHC and sold them for $700, for a gain of $390. That profit would have more than paid for the $300 annual subscription to the Portfolio Armor Substack. Consider becoming a paid subscriber if you aren’t one already.
I also exited a call spread on the same homebuilder, TMHC. I exited that one for a net credit of $1.70, or about a 14% gain. I left a lot of gains on the table with that one too by not waiting to sell it.
Profiting From A Sinking Bank
As I wrote here, I opened two put spreads on First Republic Bank ( FRC 0.00%↑ ) last week that expired today.
I bought the $14 strike puts on it expiring on April 28th and sold the $13 strike puts expiring on the same date for a net debit of $0.55. I exited those for a net credit of $0.99 for a gain of 80%.
I also bought the $13.50 strike puts and selling the $13 strike puts expiring on April 28th for a net debit of $0.25. I exited those at $0.48 for a gain of 92%.
I opened an additional bet against FRC on Thursday, which I haven’t exited yet: I bought the $3 strike, July 21st expiration puts for $1.36. As it looks like FRC is headed to $0, we’ll probably get to exit those at close to the strike price for a nice gain.
Our One Miss This Week
I placed two bets against an electric car company this week, one of which expires in July and one of which expired today.
The one expiring today I placed by mistake; I thought today’s earnings release would be the company’s Q1, but it was their 2022 annual report filed separately from their Q4 release, which was filed last month. Since there was little new info, the stock didn’t move much, and our put spread (about a third the size of our other trades listed above) will expire worthless for a 100% loss (in dollar terms, this was a $120 loss).
Profiting From A Social Media Co. Crash
On Thursday, I opened a put spread expiring today (April 28th) buying the $10 strike put and selling the $9.50 strike put for a net debit of $0.22. I exited it today for net credit of $0.49, for a gain of 123%.
Have a great weekend.
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