DailyPlay – Closing Trades (AKAM, ADM) Partial Closing Trades (CLX, BROS) – April 12, 2023

Closing Trades

• AKAM – 100% Gain: Sell to Close 2 Contracts (or 100% of your remaining Contracts) April 21st $75/$82.50 Call Vertical Spreads @ $5.45 Credit. DailyPlay Portfolio: By Closing the final 2 Contracts, we will receive $1,090. We partially closed this trade on March 29 when we closed 2 of the 4 contracts @ $2.68 Credit. Our average cost basis to exit this trade is therefore $4.07 Credit and our average gain on this trade is 49.27%.
• ADM – 92.63% Gain: Buy to Close 6 Contracts (or 100% of your remaining Contracts) April 21st $77.50/$75 Put Vertical Spreads @ $0.07 Debit. DailyPlay Portfolio: By Closing the final 6 Contracts, we will be paying $42. We partially closed this trade on March 30 when we closed 4 contracts @ $0.58 Debit, then again on April 4 when we closed 2 contracts @ $0.30 Debit, then on April 5 when we closed another 2 contracts @ $0.40 Debit. Our average cost basis to exit this trade is therefore $0.30 Debit and our average gain on this trade is 68.87%.

Partial Closing Trades

• CLX – 82.88% Loss: Sell to Close 3 Contracts (or 50% of your remaining Contracts)  Apr 21st $155/$145 Put Vertical Spreads @ $0.50 Credit. DailyPlay Portfolio: By Closing 3 of the remaining 6 Contracts, we will receive $150. Please remember to close the final 3 Contracts, as described below.
• BROS – 64.10% Gain: Buy to Close 3 Contracts (or 25% of your Contracts) April 28th $30/$28 Put Vertical Spreads @ $0.28 Debit. DailyPlay Portfolio: By Closing 3 of the remaining 12 Contracts, we will be paying $84.

Investment Rationale

As traders were awaiting today’s CPI number and FOMC minutes, they were pretty sleep on Tuesday, as the SPX closed flat on the day, the NDX closed down again (that’s 5 of the last 6 sessions), and the Dow finished up by 30 bps. If you’re a bull, at least the NDX has traded and held the daily Conversion Line (in magenta) for the past three days.

NDX – Daily

With those key economic data points coming out today, I’m not going to put a new trade on this morning. (I like to put trades on when I think we have an edge, and there’s no way we can know which way to play today until both CPI (8:30am ET) and the FOMC minutes (2pm ET) are released.

I do want to exit the CLX trade – not because its price has moved well away from us – but because too much time is passing and expiration is coming closer and closer (i.e., a week from Friday) without it getting itself into-the-money. Personally, what I would do is exit 3 of the 6 this morning, and unless the market is getting sharply knocked to the downside after the FOMC figures come out, exit the other 3 by the close. (As of yesterday’s close, we are down 83% on these remaining 6 contracts.

But with bad comes some good: Our long AKAM call spread is up 100% on the last two we have on. Let’s take that off today and pocket that solid gain.

We are also having a good time of it with our short ADM put spread. With 10 days to go, we are up 93%. Let’s say goodbye to that trade today, too.

We are also up 64% on our short BROS put spread, expiring in 17 days. We’ve got 12 of these on, so let’s cut that down to 9 today. Moreover, should we see the stock trade up to $35.50 +/- 30 cents any day this week, take another 2 more off.

Lastly, our OP team generally marks the pricing of our “cost basis” in the portfolio from option prices at about 10am ET each day. You may or may not have that price as your actual debit paid or credit received on any given trade.  It all depends what time of day you actually put the trade on. So, I use it as a guide for my follow-up recommendations, but you may have a better or worse price that you are really working with.