Trade Plan: $OPEN
Trade: -30 OPEN 8/20 12.5p for a $0.26 credit
Category: HT Wheel
Minimum Collateral to Enter: $384
Max profit: $780 | RoR: 2.12% | Collateral: $11,520 | RoC: 6.77% | Cushion: 15.86%
Now that we're getting into the window where we're about 2 weeks away from the big monthly option expiry on August 20th, we can start taking a look at stocks that have only monthly option expiries. OPEN is currently one of my favorites. Once again for some more context, here is the 180d chart:
This chart has a lot of what we like when we look for a good setup. Decent base formed in the $14-ish area which we're hoping we can count on in the next 14-day period. It also has spent a lot of time trading in the $20-30 range this year so there is definitely some precedent for a bounce. All this is to say that our breakeven price of $12.24 on the trade should be really solid.
Key Date: OPEN has earnings next Wednesday, August 11th. This is predominantly the reason that we see so much premium in the 12.5p on what has otherwise been a relatively stagnant stock as of late (when compared to its previous movement).
Exit Plan: We're hoping they have a solid earnings and we can get out of this trade for a $0.05 or less debit before the end of next week. If things go south, which seems like it's been happening far too often lately, we'll happily take assignment and run the HT wheel on this one so be careful you're not allocating too much to this position off the bat. Have the capacity to double your position.
I really don't anticipate running into too much trouble with this one (famous last words) but if it does drop to this level post-earnings we'll update our plan both on here and in the Discord come next Thursday morning.