Some of the options in my holdings expire next week, and Friday is the last day on which they can be traded.
Time to map out a strategy:
SBUX, bull put spread (p22.5/-p24): The price stands about 1.5% below entry, so the stock's bullish potential has not played out. Shares are now trading at 32.32. The breakeven at expiry is 23.36, well within the average daily trading range. I'm gong to hold on to the options for now, but with a very tight stop/loss.
SMH, also a bull put spread (p27.5/-p29) was sold this morning when new bear signals showed. I locked in a small profit.
LVS, a covered call (-c16). The stock, having gapped up unexpectedly four days go, is trading around 18.40. If the call is exercised, I would need to sell my shares at 16. I bought the stock at 15.77 and got 0.94 for the call, so my net profit is 1.17, or 7%. If I hadn't protected with the call, the profit would have been 2.63, or nearly 17%. It would cost $2.50 to buy back the calls, so the net profit if I were to close would be only 0.13. Better to let the option be exercised.
KO, an iron condor (p50/-p52.5/-c57.5/c60), is trading just below 56. The range of max profit is 52.5 to 57.5. I could close now for less profit, but the stock is trending down but mildly and has 6% to go before hitting the lower level of profitability. I'll wait.
So, closing SMH is the only action required today. The rest will need to be either closed or left to their fate before Wednesday of next week.
Topics: Coca-Cola, Las Vegas Sands, gambling, resort, Starbucks, coffee, semiconductors
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