DailyPlay – Closing Trade (MDT) – May 5, 2023

Investment Rationale

Pacific West looks to be the latest casualty of the regional bank space, and they could be gone shortly. These other “cockroaches” – which I previously warned would likely tome out of the woodwork are doing just that, and we may start having weekly events like this going forward. So, even given AAPL trading up to near $170 after their earnings came out yesterday, I’d still be looking to sell rallies (and as a reminder, we’re still going to look to go long the SPY June 16th $410; $411, and a $413 put spreads (against selling the $385 strike) if the opportunity comes today or early next week).

I missed seeing that LYFT was set to report earnings yesterday, for I would have been out of virtually all of our short $10/$9 put spreads before they came out. They missed expectations, and a ~20% gain (of which we took partial profits on yesterday morning) turned into a loss. I accept full responsibility for missing that release date, and I will work with our team to make sure that there is a way that I have knowledge of when earnings are next out for every open position we have on.

That being said, we still need manage the trade. With our still having 20 spreads on, let’s see if the stock gets any bounce today from near the $9 level that it traded down to late Thursday afternoon. The reaction seems overdone, and the $8.87 level was the lowest close of late March. We’ll figure out an exit strategy next week.

LYFT – Daily

Elsewhere, MDT broke the $89.57 stop out level we were using to exit the final two long $82.5 calls we’ve had on, so you should have sold out of them yesterday. The large gain we made in this trade has helped offset some of the recent losses.

We are still short 11 IEF $99/$100 call spreads. The ETF rejected the early April high yesterday on its intraday high, so we may still get a chance to kick out of these on a pullback to near the $99.50 area. Look to exit them if that opportunity comes, but also exit the spreads using a close above $101 as your buy-stop level.

IEF – Daily