SVU Trade Results And Friday Q&A

Trade Results - Supervalu (SVU) Hello Smart Option Sellers! Let's go over yesterday's buy-back trade on SVU. Considering the stock jumped over $12 per share before the market opened, all the put options were going to be down big time in price, allowing us to buy back higher strike put options to close out the trade. My instructions from yesterday were to have you buy any October 2018 or January 2019 put option with a strike price higher than $10 for no more than $.05 per contract. This was attainable for the October $25 puts or the $January $21 at the time of sending the alert. Why would we do this? Think about it. If the SVU buy-out deal falls apart, it would most likely send SVU stock crashing back down towards $19 or $20 per share (pre-announcement levels). If we were now long a $21 put or $25 put, we could make tons of money off of a big stock drop. We would still have the October $10 put-sell in our accounts, but that option contract wouldn't really go up in value because it's still very far out-of-the-money. Anyway, for official track record purposes only, we'll book the win on the $10 puts and show them as closed out, even though most of you traded a different contract yesterday. If you bought one of the other strike prices, you'll just need to keep an eye on it until the expiration comes around. Most likely the SVU deal will go through as planned and the stock will remain at $32 until it closes later this year. The put options will all end up worthless at that time, but just keep an eye on them just in case. If I see any surprising action on SVU in the next few months, I will give everyone a head's up. For now, here's what we did (for official track record purposes only) Bou