DailyPlay – Partial Closing Trade (BYND) – February 17, 2023

Partial Closing Trade

• BYND – 25.00% Gain: Sell to Close 10 Contracts (or 50% of your Contracts) Mar 17th $17.50/$22.50 Call Vertical Spreads @ $1.15 Credit. DailyPlay Portfolio: By Closing 10 of the 20 Contracts, we will receive $1,150. 

Investment Rationale

The well-higher than expected PPI number yesterday never allowed the SPX to go green on the day, and then a late sell-off sent it spilling to over a 50-point loss (-1.38%) to pull the index down to 4090, its worst close since Feb. 9th. But more importantly, the chances of today closing above 4148 are greatly reduced, and thus, it makes sense to me to lighten all tactical long positions put on since the Oct. low has been made.

Within 100 pts. of yesterday’s SPX close, I see the 4050 put strike with the most open interest (~7,700 contracts) that expire today. On the call side, the largest open interest is in the 4100 strike (some 8,300 contracts) which can also go out worthless depending upon how today trades. These large open interest strikes often act as trading magnets on expiration days.

Looking at where we have some long exposure that I want to actively manage, yesterday Moderna (MRNA) got some bad news on drug trial results, sending the stock down $5. We are short the Feb. 24th $170/$160 put spread from $4.98. It went out yesterday at $3.46 mid. I’d place a buy stop back at breakeven entry to protect this from potentially turning into a loser.

We are also long 20 March 17th BYND $17.5/$22.5 call spreads from $0.92. Yesterday it closed at $1.15 on almost a 2% pullback in the stock. Let’s kick out of 10 of the 20 today to lock in what yesterday closed with a 25% gain since putting the trade on.

For now, I will stick with the several bearish trades that we have open in the portfolio.