Kidneys getting flushed with Davita

One of my long-term account positions is a long position in $DVA:

I believe they provide a critical healthcare service that many rely on each week and have been bullish on them for some time. As with many of my positions, I protect them with an Option Collar. This is more robust than a traditional Stop loss and allows me to focus on other positions as I let this one ride.

I currently have a January 120/110 Collar on this position, so I thought I would give some detail on how this is helping during this current pullback:

  1. Short the January 120 Call at $2
  2. Long the January 110 Put at $2.50
  3. This Collar was initiated on November 19
  4. My long entry is at $108
  5. Current bid/ask info: 120 Call is .25/.35 (so can buy back very cheap here). The 110 Put is 5.40/5.70 (so this has more than doubled in value from entry).

Given the time I have until January expiration, there is no need to do anything on this trade – let it ride. As price has flushed a little to the downside, this Collar has gained in value thus helping to offset the loss in gains on the long stock position.

Hope your week has gone well.

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