Exits, 9/18/2023
How we did on our most recent trade exits.
Dids/Pexels
Last Week’s (And Today’s) Trade Exits
As soon as I exit a trade, I note that in the comments of the post where I first mentioned the trade; at the end of the week, I try to track them all in one post. These are the trades I exited last week or today:
Stocks or Exchange Traded Products
None
Options Trades
Put spread on Western Alliance (WAL -0.75%↓). Entered at a net debit of $0.90 on 6/1; expired worthless on 9/15. Loss: 100%.
Calls on Rent the Runway (RENT -1.96%↓). Bought on 9/7; expired worthless on 9/15. Loss: 100%.
$20 strike calls on the ProShares Ultra Bloomberg Natural Gas ETF (BOIL 0.00%↑). Bought on 1/25; expired worthless on 9/15. Loss: 100%
$15 strike calls on the ProShares Ultra Bloomberg Natural Gas ETF (BOIL 0.00%↑). Bought on 2/21; expired worthless on 9/15. Loss: 100%.
Calls on BioLineRx (BLRX -25.64%↓). Bought at $0.10 on 8/18; sold half at $0.10 on 9/11. Profit: 0%.
Call spread on Hawaiian Electric Industries (HE -0.45%↓). Opened for a net credit of $1.00 on 8/17; expired on 9/15 with the stock at $13.12, so our short $12.50 strike calls were exercised and we ended up short 200 shares of HE which we covered at $13.05 on Monday, so we kept $0.45 of the net credit. Since we were risking $1.50 on this trade, making $0.45 on it means we had a gain of 30%. Profit: 30%.
Skip-strike butterfly spread on GameStop (GME -0.82%↓). Entered at a net debit of $0.70 on 6/22; exercised on 9/15 leaving a net credit of $1.00. Profit: 42%.
Comments
I usually publish these Exit posts on Fridays, but a couple of options trades got exercised then and didn’t settle until today.
On the stock side, last week was another week with no exits, as the performance of our top names continues to be strong.
On the options side, let’s go through the exits:
Western Alliance (WAL -0.75%↓) was one of the regional banks we bet against due to its level of unrealized losses and indications that it had exhausted the new federal bank assistance facility, the BTFP. We keep getting more signs of stress in the banking system, but so far, no more regional banks going bust. It could be we were too early with some of these trades.
Rent the Runway (RENT -1.96%↓) was an earnings trade that didn’t work.
The ProShares Ultra Bloomberg Natural Gas ETF (BOIL 0.00%↑) calls were a bet on natural gas that didn’t work. Natural gas was trading at multiyear lows when we placed these, but there appears to be plenty of supply. I have one more open BOIL trade that expires in December; in the future, I will only bet on BOIL or KOLD when they first appear in Portfolio Armor’s top ten.
Same as 3.
BioLineRx (BLRX -25.64%↓) was a biotech lottery ticket. We made 350% on half of our calls on it the previous week, and exited the other half for no gain this week, after the company announced its FDA approval on 9/11. This turned out to be a sell-the-news situation. On 9/12, the company had a conference call elaborating on that approval, and those calls were trading for $0.05 after that call.
This credit call spread on Hawaiian Electric Industries (HE -0.45%↓) was one of a few bets we made against the utility at the center of the Maui wildfire last month.
We got the direction and timing of our entry into this bet against GameStop (GME -0.82%↓) right, but we would have made more money if our initial limit order to exit were set for less than 90% of the spread between the first two strikes in our split strike butterfly. Maybe we could have exited earlier for a net credit of $1.60 instead had we set it to 80%.
