Liz here, drawing the line. Believe it or not, there’s one short I can’t get on board with.

NFTs? Housing bubble? Autos? Exercise bikes? Slack? Bring it on. But not chocolate. You’ll have to pry my chocolate out of my fat, pregnant hands.

Every time I go to Walgreens, I secretly buy a Whitman’s Sampler box, bring it home, and hide it in the very top of a secret cupboard, and I don’t go out and get it until my husband is safely in jail. (He works there, he is not incarcerated, but I like freaking people out.)


“Made to share?” Who writes this b*******?

HANDS OFF MY CHOCOLATE, TOM.

Fine, I’ll give you the trade. But I don’t have to like it.

I will also give you $500 off literally any service, to distract you from this whole idea.


I’ll Just Step Back And Let Tom Kill Everything I Love

(Every so often, though, I’m just going to step in with a jarring picture of chocolate to make you think about what you’re doing.)

We’ve said it before, Money Calendar is looking at the past 10 years of data for the price moves and patterns that have happened at least 9 of the past 10 years.

Since the markets up until this year has been overall bullish, the bearish patterns are scarce. At least the ones that fit the profile we want.

Look below at the bearish patterns with a start date of today….


Only one has a length of trade between 20-30 days, IRBT (top green arrow) and we have already highlighted that for our Fast Fortune members. The others either aren’t the length we like; the average profit isn’t what we like (3 points or more), nor do they have a positive power meter.

CHOCOLATE!


We need a security to meet all three in order to consider a long position, i.e., a Long Call or Put or a Call or Put Credit Spread.

What we have done over the past 4 months is incorporate the Credit Spread strategy, whether it be a Call or Put Credit.

We look to execute this strategy differently in that we want as little length of time as possible. We still need a positive power meter, but we don’t need an average profit number.

We look to set up the credit spread based on where we don’t think the security will be by the expiration we are trying to work.

We also like to have a credit spread with a 1% average ROI per day and the security here is the one we found that may work: The Hershey Corporation (NYSE: HSY)
(bottom green arrow).


Option Scenario: Call Credit Spread

HSY shows it has traded lower 9 of the past 10 years.

We don’t need to focus on the Average Profit Move as we don’t care how far it drops. We need HSY to be trading under the sold strike in the spread, which is $215.

So long as HSY is under $215 at expiration, no one will want to buy it from us at $215 and that option expires…and therefore we don’t need to exercise the $217.50 and that option expires. Both options expire and the account realizes 100% of the premium sold which is $30 per contract.

CHOCOLATE!


Risk on the trade is the difference in the strikes less the credit generated, or the account makes $30 on $2.20 risk.

That makes for a potential 13.64%. ROI, which is the $0.30 divided by $2.20. Since this is a 6-day trade if able to be opened today, that averages a little over 2% ROI per day average.


Note this one will be tough to get a fill on since the options spread for each strike is pretty wide and we are trying to work both spreads so that it can get opened for a fill of $0.30.

Here’s what to do:

NICKEL SLOTS: TOM

Action to Take: Buy to Open the HSY June 24, 2022 $217.5 Call and on the same order ticket, Sell to Open the HSY June 24, 2022 $215 Call. Pay up to $0.30 for the spread.

Enter as a Good til Canceled (GTC) order.

Humph. Fine. Bye. Have a great weekend.


Liz

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