DailyPlay – Partial Closing Trades (USO, ZTS) – December 5, 2022

Partial Closing Trades

• USO – 55.13% Gain: Buy to Close 4 Contracts Dec. 9th $67/$65 Put Vertical Spreads @ $0.35 Debit. DailyPlay Portfolio: By Closing 4 of 16 Contracts, we will be paying $140.
• ZTS – 120.21% Gain: Sell to Close 2 Contracts Dec. 16th $150/$160 Call Vertical Spreads @ $6.32 Credit. DailyPlay Portfolio: By Closing 2 of 6 Contracts, we will be receiving $1,264.

Investment Rationale

With the VIX down to near 20, I think we’re safe in thinking that the bulk of what we’ll be doing now will be buying option positions. This is clearly the lower end of where we’ve seen this vol index trade in 2022.

We deftly got into the Nov. 22 conditional USO short put spread a day later, when price got down to our target entry price of $67.10. We are short the Dec. 9th $67/$65 put spread from about 78 cents, and it closed at $0.345 mid on Friday. Let’s take 4 of those 16 spreads off today as they expire on Friday, and I’ll be looking to unwind the balance in pieces over the next several days.

USO – Daily

We are also long the ZTS Dec. 16th $150/$160 call at $2.87. With it having closed at $6.32 mid on Friday, today let’s take off 2 of the 6 spreads we have on to partially lock in the 120% profit we have in this position.

ZTS – Daily