Special Alert: Closing out our SH call position with another hefty gain
Key points in this issue
- We are issuing a sell on and closing out the ProShares Short S&P500 (SH) November 2018 28.00 (SH181116C00028000) calls that closed last night at 1.35, more than 510% above our 0.22 entry point.
Following yesterday’s tumultuous second day in the stock market that sent all the major market indices lower, I’m opting to “take the money and run” with the second half of our ProShares Short S&P500 Calls position given not only the outsized gain in a relatively quick manner, but also because we are getting favorable bank earnings from JPMorgan Chase (JPM), PNC (PNC) and others this morning. The good news is they confirm the domestic economy is on firm footing, and that is leading to a reprieve from the last few days for the stock market.
As I mentioned yesterday when I issued a sell on half of our SH calls as we enter the September quarter earnings season in force next week, we are likely to see the stock market trade day to today odds are this means our SH calls will bounce around, but the risk is they trade off from this week’s pronounced move. Let’s be prudent and book the win while we have it is my thinking. We’ll tabulate the actual exit price based on market open, but as it looks now we stand to have a blended return near 400% for this SH call option position in full. Not bad for a few weeks of work, and a solid reminder to listen to the data and our thematic lens.
