Trade Results - BIG
Trade Results - Big Lots (BIG) Hello Smart Option Sellers! Hope everyone had a good weekend. The market is down again this morning, and there's only one reason why - uproar over the Game of Thrones finale! Lol. Personally, I had no stake in the show, as I never made it past episode 8 of season 1. But obviously there are millions of fans, many of whom are not satisfied with the final season, let alone the final episode. I think one of the hardest things for television show is how to stick the landing (finale). Not everyone will be satisfied, but you try to find a happy medium. So, I hope you fans can move on with your day. It'll sting for a little bit, but you'll get over it. Now, in all seriousness, let's go over the results from Friday's buy-back trade on BIG. We decided to unload our BIG position because I did not like the way it was performing. It couldn't maintain it's uptrend since last earnings and had collapsed over the last week. Even with the market rebound last week, BIG did not participate. That was telling for me. And with earnings coming out on May 30, I did not want to chance another bombshell. If you decided to close out the trade like we did officially, I've got the overall results below. Here's what we did: Bought back (bought-to-close) the BIG July 19, 2019 $30 put options for an official buy price of $1.43 per contract as a closing transaction (bought-to-close). Fills went across the tape between $1.28 to $1.50 per contract, with most hovering between $1.40 to $1.45. We'll be using $1.43 as the official mark. Here are the final numbers of all trades involved: We originally established (sold-to-open) the January 2019 $32.50 puts on August 31, 2018 for a sale price of $.38 per contract. On December 10, 2018, we closed (bought-to-close) this position for $3.90 per contract, which locked in a loss of $3.52 per contract ($3.90 - $.38). Also on December 10, 2018, we rolled that position by establishing (sold-to-open) the July 2019 $30 puts for a sale price of $4.20 per contract. On May 17, 2019 we closed (bought-to-close) this position for $1.43 per contract, which locked in a gain of $2.77 per contract ($4.20 - $1.43). Between all the trades, we netted a loss of $.75 per contract ($3.52 - $2.77). If these were the only trades you took, then your loss was $.75 per contract. We also instituted a hedge trade back in March to protect against their last earnings report, in case of a dud. But BIG surprised with good earnings so the hedge trade was a non-factor. I didn't hear from many of you on that one, but we still marked it in the official portfolio. Sure, we could've rolled this position again, but I feel that would just be throwing good money after bad, especially if the stock keeps dropping. It would just prolong the agony, stress & frustration. Better to close it out completely and move on. It's unfortunate to lock in this loss, but let's move forward and find better trades. For those of you who might have opted to hold, you will be on your own for managing this position. You can sweat it out until July expiration, or even consider rolling to a new position. You decide. That's all for now. With the market lower again this morning, we will sit tight and see how the day plays out. Continue to hold all other open positions as-is. Contact us here with fills, comments, questions or concerns. Regards,
Lee Let's Grab That Cash!