Category: Trade

Today in Finance Club, we decided that eBay looks like it is “going to move,” and one of the ways to play that is through a long strangle. This is a risky trade, and will probably go against us, but since this is paper money, we will place it and track it for the learning. This is the trade:

• Bought 1 of the March 18th 2016 24 Calls for $0.46
• Bought 1 of the March 18th 2016 23 Puts for $0.31

This results in a net debit of $0.77, for a maximum loss of $77 and an unlimited maximum profit.

– Michael and Nolan

Today in Finance Club, we placed a new trade on International Paper. We sold a call spread on IP, with a bearish thesis that IP will remain below $38.25 by March 18th. The trade is as follows:

• Sold 3 of the March 18th 2016 38 Call for $0.35
• Bought 3 of the March 18th 2016 39 Call for $0.10

This is for a net credit of $0.25, with a maximum profit of $75 and a maximum loss of $225.

– Michael and Nolan

In the club today, we also closed our XLU call spread for a profit. XLU, even though it was up today, has remained below our thesis price and decreasing volatility and time decay have really helped us in this short trade. We bought back the 48 call for $0.08 and sold the 49 call for $0.02, resulting in a profit of $0.16 or with 5 contracts, $80.

– Michael and Nolan

In the club today, we closed our put spread on XLE by buying back the 53 put for $0.17 and selling the 52 put for $0.12, resulting in a net gain of $0.17, which with 6 contracts would be $102.

– Michael and Nolan

We decided to utilize more of our capital for long run investments, this time in the biotechnology sector with the iShares IBB ETF. We did the following:

• Buy 4 shares of IBB at $258.78.

Our long term thesis is that biotechnology is a sector that will see tremendous advances. Biotech has pulled back and we see this as a buying opportunity.

– Michael and Nolan

Today we placed a trade on XLU, this time with a bearish thesis. We did the following:

• Sold 5 of the March 18th 48 CALL for $0.34
• Bought 5 of the March 18th 49 CALL for $0.12

This led to a net $0.22 credit, for a maximum profit of $110, and a maximum loss of $390. Our thesis is that XLU remains BELOW $48.22 by March 18th.

– Michael and Nolan

Today in finance club, we also purchased 6 SPY shares for 192.87 each. This is for our long term portfolio.

This trade is for Michael, Nolan, and Aabhash.

Today in finance club, we sold a put spread on XLE. The details are as follows.

• Bought 6 of the March 18th 2016 52 puts for $0.73
• Sold 6 of the March 18th 2016 53 puts for $0.95

Thesis: This Energy ETF will be above $52.78 by March 18th for maximum profit.

This trade is for Michael, Aabhash, and Nolan

 

Hello members,

The RHS Finance Club is introducing trade blogs! These blogs are specific buy/sell/hold recommendations on underlyings. They will be written by Michael initially, and anyone who wants to write them can email me. Our first one is right below this post.

DISCLOSURE: Michael Trehan, The Rocklin High School Finance Club, Rocklin High School, or any other party affiliated with the aforementioned DO NOT assume liability for any loss incurred based on financial recommendations, implicit or explicit, made through any medium.

– Michael Trehan

Hello members,

I have written a lengthy blog about energy. Please read the article here, I didn’t want to publish it on this website this time. Consider it supplemental reading.

Also, take it to be the format of future trade blogs.

– Michael Trehan