Tractor Supply – a look at an existing position into Earnings

I have had a position in $TSCO for the Submarine Basket since 09/25/2014. Here is the current position info:

TSCO

I received a few comments today about letting the Long stock position stay “capped” into Earnings. If you review the chart above, you can see that my priority should be to protect the recent gains. It has had quite an UP move from the October lows so it is my view that the risk may be to the downside now.

If I am wrong? No harm no foul. I can sell premium in a future expiration to buy back the Short $80 Calls at February expiration. The Put Ratio would go poof.

Worth noting: I have an Options Net of $1.10 & accumulated booked stock gains of $7.07 up to this point.

 

- DM Noon CST

 

Trading Activity

Caterpillar $CAT  I have StC the January 30 weekly $80 Puts thus leaving the Short weekly $79 Puts. Options Net improves to: $2.97 & stock gain remains $.57

Illumina $ILMN  I have StC the January 30 weekly $200 Calls thus leaving the Short $215 Calls. I set a Buy Stop at $210 (would be a hedge). Options Net improves to: $15.44

Polaris $PII  I adjusted the Buy Stop to $147.50

Yahoo $YHOO  I went Short stock in A/H on 01/27 at $51.88 and have covered 1/2 today at $49.02

Radware $RDWR  Had a great Earnings report but was sold off anyway. On the pullback I got Long stock at $19.02 and set a Stop at B/E. I have since added a Long Feb/Mar 20/21 Diagonal Call Calendar for a .15 credit (Short March Calls can be viewed as covered by stock if need be)

Incyte $INCY  The Long stock hit a Stop at $83.40

Vertex Pharma $VRTX  I have unwound the RRCS due to weakness into Earnings. Options Net final: $3.68 & stock gain remains $2

 

 

StC = Sell to Close

- DM 9:30 AM CST

 

Trading Activity

Activity this morning:

Mattel $MAT  Bought the Dip on the pre-lim guidance & CEO departure news. After selling the stock I initiated a Long February 26/28/25 RRCS for a small debit. I have since StC the Long $26 Calls leaving a Short 28/25 Strangle for February. I have set a Buy Stop at $27.90 (would be a hedge)

Bed Bath & Beyond $BBBY  I have adjusted the Long Feb Puts up to the $75 strike (Submarine Basket)

United Parcel $UPS  I have added Short Stock at $102.06 (downgrade news in P/M, this is a hedge, Submarine Basket). I have StC the February 06 weekly $103 Calls for .88 credit thus leaving me with Short $103 Puts for the same expiry

Netflix $NFLX  I have adjusted the Short Calls (covered) to the September $420 strike for a credit. Options Net improves to: $5.20

 

RRCS = Risk Reversal Call Spread
StC = Sell to Close

- DM 10:00 AM CST