A post-Earnings review in Whole Foods

I have owned a long stock position in $WFM for a while now and elected to leave it alone into Earnings (has a February 14 Weekly 55/52.5/47 Collar PS as protection). Let’s see how things look in A/H:

  1. The stock is trading below $52 on the EPS miss
  2. Margins are continuing to be impacted

So what do I do with the trade now? Let’s break it down:

  • I am long stock at $56 since 12/17/2013
  • I am short the February 14 Weekly 55 Calls (now OTM)
  • I am long the February 14 Weekly 52.5/47 Put Spread. The Long 52.5 Puts are ITM right now. This provides protection down to $47
  • I have a $.60 Options Net
  • There is a stock gain of $2.60 (from an earlier stock trade involving short stock)

You can view a weekly review of this trade since initiated on the Blog here, just search for “Position Updates”.

 

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