Strangle House Cleaning
Close out CSIQ, ANF, & APOL
PLAY: Sell your CSIQ March 20 Calls (O:CSIQ 10C20.00) at market, good for the day.
PLAY: Sell your ANF March 32 Puts (O:ANF 10O32.00) at market, good for the day.
PLAY: Sell your APOL March 65 Puts (O:APOL 10O65.00) at market, good for the day. Hold your ESI March 110 Puts (O:ESI 10O110.00).
Dear Bottarelli Research Member,
Congratulations on your DO and NFLX winners!
If you’ve been trading with us for a while, then you know that we’re still holding the second half of some earnings strangle positions, which we’ll clean up right now.
Specifically, we’re still carrying the CSIQ March 20 Calls (O:CSIQ 10C20.00) and the ANF March 32 Puts (O:ANF 10O32.00). Since we already closed off the opposite side of both trades, we’re looking at marginal losses on both positions. With March expiration breathing down our neck, I don’t think we have time to turn these two around. Therefore, let’s close them out now, and put our money to work in more attractive plays.
The break-even point on our CSIQ March 20 Calls (O:CSIQ 10C20.00) is $2.00. Right now, these calls are trading between $1.60 and $1.80. Let’s take the manageable loss and move on. Sell.
PLAY: Sell your CSIQ March 20 Calls (O:CSIQ 10C20.00) at market, good for the day.
Regarding ANF, strength in the retail sector has continued to push shares higher. Since we sold the call side already, our maneuver backfired. As a result, we have another small yet manageable loss. Let’s officially close this position and move on. Sell.
PLAY: Sell your ANF March 32 Puts (O:ANF 10O32.00) at market, good for the day.
Closing these two earnings plays will then leave us holding the GRMN March 32 Puts (O:GRMN 10O32.00), which I’d like to hold for a little longer. The $31.00 level still looks like it’s in the cards.
On the same hand, I’d like to take the cautious approach in the for-profit education sector. While both stock charts continue to indicate that the stocks have room to fall (and could fall at any time), the fact is that ESI and APOL both continue to rally off any temporary gap down.
The ESI downgrade, for example, did nothing to spook the sector. Therefore, it feels like we’re swimming upstream with these two positions.
Given this situation, let’s limit our exposure by selling APOL for a marginal loss, and then hold ESI to see if the breakdown can finally start to materialize.
PLAY: Sell your APOL March 65 Puts (O:APOL 10O65.00) at market, good for the day. Hold your ESI March 110 Puts (O:ESI 10O110.00).
And as always…
Lock and load!
Sincerely,
© 2012 CSR Group, LLC. All rights reserved. Published in USA.
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