[Options] February Positions Review

Sean McLaughlin
February 4, 2021

As February gets under way, it’s time to review positions with February options that remain open (haven’t already hit profit targets or been stopped out). This month there isn't much to discuss as most of our February options trades have already been closed out thanks to hitting their profit targets or getting stopped out.

Most trades I put on for All Star Options tend to have a minimum duration of 30 days (short premium plays) and often as long as 6-8 months (for long premium plays). As options approach expiration, greeks like theta and gamma start to become my enemy and whipsaw my P/L. Therefore, as options and spreads get into the expiration month, my best practice is to put each position on notice — it’s time to take action.

At the time of this writing, I've only got 2 remaining positions with Feb options.

In the scoreboard below I denote the date we exited each position:

February positions closed for profits: $GLD (1/21)

February positions closed at a loss: $SWKS (10/29), $CL (10/28), $CVNA (10/21)

Remaining Open Positions:

  • $SYNA Feb/June 120 Call Calendar: As I write this, SYNA is trading below $105 and it looks like a high likelihood that our short Feb 120 calls will expire away worthless, leaving us naked long the June 120 calls to hopefully enjoy another leg higher through the spring. So really the plan here is to do nothing. The only action item will be if SYNA trades to $120 per share before February expiration. If that happens, then I'll close the entire trade down and book the profit. Beyond $120, we got on the backside of the PnL curve of this spread -- where we don't want to be.
  • $KO Long Feb 60 Calls: With KO trading below $49 per share, these calls are dead. There is currently zero bid. So, we'll just hold these lottery tickets and hope somebody offers a Coca-cola buyout at $100 per share before expiration ;)

That's it. Pretty easy month this month. Which is nice after a very busy January expiration cycle.

If you have any questions about these trades, email me here.

~ @chicagosean

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