On 9/22 SFIX rose to $41. We sold our 10/15 put for a $44 debit, leaving us with a $67/contract profit over night!
What’s the Trade?
9/21 – With SFIX trading at $35 and a nice high IV Rank of 59%, consider selling a put at the $28 strike for at least $111.
- Sell the October 15 $28 put
- Premium: Try to collect at least $111
- Rationale: This is an undefined risk trade. You can make up to $111 if SFIX stays above $28 on or before 10/15 expiration. SFIX has a high IV Rank of 59% which helps us collect more premium. This trade collects $5.28 in daily theta decay. ReadyFor401K has identified a strong support level at 34.84 (yellow lines above) so this trade takes advantage of that, and still leaves additional room if we’re wrong.
- Probability of making 55$: 86%
- Max Loss: You’ll have to purchase 100 shares for $2800 if SFIX goes below 28 on or before 10/15.
- Assumption: Bullish
- Timeframe: ~Overnight to 3 weeks