I wanted Walred instead of Walgreen – now what?

An earnings trade review – in progress – on $WAG

WAG_tradeMy earnings trade on $WAG was the following:

  • I am long the March 28 weekly 63.5 Puts
  • I am short the March 28 weekly 61.5 Puts (2x)
  • This is a 1×2 Put Ratio
  • This trade was done for a tiny $.01 credit

The stock has trade up but has faded some back down to the $66 level. So what is the next step? Here are a few potential paths:

1) The stock drifts into Friday expiration so the entire trade expires worthless. I’m rich

2) The stock falls to $64 by Friday expiration. I could potentially get a little for the long $63.5 Puts on Friday

3) The stock falls to $62 by Friday expiration. Booyah! I would sell the long $63.5 Puts & leave the short Puts to expire

 

 

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