A look into the Submarine Basket starring Abercrombie & Fitch

I utilize a strategy wherein I am buying stocks in a pullback but have found a bottom. The trades that fit this scenario are put into my Submarine Basket. I currently have 8 positions but wanted to do a review of $ANF.

I am long stock on a trigger at $37 on 10/30 and have done a few Options trades around that position. Here is my journal entry:

ANF_sub_basket

Let me break it down:

  • After the initial long entry I sold the November 1 weekly 37 Straddle for a $.73 credit on 10/31
  • On 11/1 I bought back the short Straddle above and sold the November 8 weekly 37 Straddle for a whopping $3.13 net credit
  • This brought my Options Net to $3.86
  • On 11/4 I bought back the short November 8 weekly 37 Calls and sold the November 8 weekly 38 Calls for a $.54 debit, lowering my Options Net to $3.32
  • This leaves me currently short the November 8 weekly 38/37 Strangle and long stock
  • Price is currently hovering around $36 so the Puts are ITM but the Options cushion is more than covering the down move

The next step – if price continues to hover near the 50 SMA as it is now – will be to sell the November 37 Puts on Friday to buy back the short November 8 weekly 37 Puts. This would be for a credit. The short November 8 weekly 38 Calls go poof, I keep all premium collected.

 

One thought on “A look into the Submarine Basket starring Abercrombie & Fitch

  1. I sold the stock on the breach of the 50 SMA near $36 today. This leaves me still short the weekly 38/37 Strangle so I will need to adjust by Friday expiration. Options Net is at +3.32

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