Cabot Profit Booster – Position Update
In light of last night’s events in the Middle East, and this morning’s market declines, I wanted to update where we stand with our Cabot Profit Booster positions. The good news, despite today’s wobbles, is that all are working very well!
Axon Enterprises (AAXN) stock is trading at 73 which is unchanged from our original buy. However, the January 75 call that we sold for $2.50 is now worth $1.25, which means we have a profit of $125 per covered call executed. As we get closer to January expiration (1/17/2020) I will give further instructions on how we will manage this position.
Splunk (SPLK) is trading at 151.5 which is a great level for our February 155 covered call. At these levels we are up $2.25 on our stock purchase, and we are also profitable on the call that we sold, which is down $0.80. This is working perfectly as both sides of the trade are profitable, as the stock appreciation plus the profit of the call sale equals a net profit of $305 per covered call.
Pan American Silver (PAAS) is trading at 23.85, which is 1.85 above our short strike price. This is an ok/good scenario as we are on our way to collecting our full $110 per covered call. However, because the stock is so far above the strike price of the call we sold, as we near January expiration, I will give instructions on whether you should take your profit and move on, or roll to a new strike to create even greater yield. My decision on this will be based on the markets, as well as PAAS’s stock strength, near January expiration.
Floor and Décor (FND) was bought on Tuesday and is virtually unchanged from that buy, so there is little to add at this point.
Of course, while these positions are all working right here, I’m not anticipating they will all expire at their perfect spots. Life isn’t that easy! So I’ll be in touch with further updates in the weeks to come with directions on how to manage these positions.