January 27, 2020 Terry’s Tips Trade Alert – Rising Tide Portfolio

COST has recovered nicely today after the early selloff. But delta has now declined below gamma. Thus, we need to raise some strikes to get delta back to a more comfortable level:

BTO 1 COST 20Mar20 310 call (COST200320C310)
STC 1 COST 21Feb20 300 call (COST200221C300) for a credit of $2.70 (buying a diagonal)

BTC 1 COST 31Jan20 307.5 call (COST200131C307.5)
STO 1 COST 31Jan20 315 call (COST200131C315) for a debit of $3.85 (buying a vertical)

BTC 1 COST 31Jan20 310 call (COST200131C310)
STO 1 COST 31Jan20 315 call (COST200131C315) for a debit of $2.20 (buying a vertical)

BTC 1 COST 31Jan20 305 put (COST200131P305)
STO 1 COST 31Jan20 312.5 put (COST200131P312.5) for a credit of $2.55 (selling a vertical)

BTO 1 COST 21Feb20 312.5 put (COST200221P312.5)
STC 1 COST 21Feb20 310 put (COST200221P310) for a debit of $1.25 (buying a vertical)


Be prepared to change this (these) price limit(s) by $.05 or more in order to get an execution.

Happy trading.

Terry