BY ANDREW GIOVINAZZI
April 29, 2024
Yo Pit Crazies,
This Wheel Trade set up could make sense for IBM bulls
I was doing the OptionInsider Radio Networks Options Oddities show and scrolling through my dividend list, and up pop’s IBM going ex div soon. I can sell the IBM May03 165/160 put credit spread (PCS) for $1.00 around show time. IBM did rally into the end Friday so I am getting closer to .70 on the put credit spread for Monday.
Now, if the put credit spread goes out worthless I get the .70 which is a good 1 week return on
$5.00. If assigned I will buy a new junk put around $160, and sell an upside ATM call. The
$1.66 dividend plus the call write would put my yield to close to $4 for just a 1 week hold.
With a put at $160 that is a great return on risk.
On to next week.
To Your Trading Success,
-AG
Andrew Giovinazzi
30-Year Trading Pro
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