re: Theta gang/ the wheel trades week of 3/15

quote:

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could you give us an example trade and closing strategy here?

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Sure. So this one is a little more complex since there's also arbitrage going on overall with tlry right now. Whenever merger goes through you'll get 83 shares of tlry for each 100 block of apha shares. Tlry is trading pretty consistently mid to high twenties since deal was announced. Apha should get exhanged for value in lows 20s per share.

So what I'm doing is selling weekly puts, looking for a profitability estimate of about 70-75% in my robinhood app. So for example this morning I placed an order to sell 2 $18.50p that expire 3/19. Now I wait for Friday. I make $120 cash here. Now either I'll just collect that money rinse and repeat next week.

Or I'll get assigned shares which means I'll buy 100 shares at $18.50 and keep that premium so my cost basis is more like $17.30.

Then next week I begin selling my calls at that same 70-75% profitability range. Will target usually around 20-21 a share if the juice on em is there to make money, sometimes weeklys are shitty.

If the return is weak I may go out further than weeklies on the call side but no further than 45 days if it means making a little cash and gets closer to my expected low 20s merger price on the strike.


But then either my shares sell and I start the cycle a new or eventually this quarter the merger goes through and I'll either get shares sold at my call strike price or transitioned into tlry then sold off there.