#SueCollar CMCSA Adjustment

Here is the opening trade I did on Oct 11:
1. Bought 600 shares @ 45.02
2. Sold Nov 22 45 call @1.46 x6
3. Bought Nov 1 43 put @ .46 x 6
Net delta is 145 on 600 shares

Here is the adjustment:
1. Underlying price is 44.25 right now
2. Nov 1 43 puts: bid is 0.00, expiration at full loss is expected (-276)
3. Bot 6 Nov 22 43 put @.42
4. Bot 6 Nov 22 45 call @ .52, to close ($564 profit)
5. Sold 6 Dec 13 44 call @1.35

Net options trades $846 credit / 600 = 1.41 cost basis adjustment to $43.61. As before, not fully realized.

Thought process:
1. On Oct 11th the position delta was 145 on 600 shares. This morning the position delta was 350 on 600 shares….quite a bit more risk in the position (due to short-delta decay). I like to keep deltas below 30% of the underlying share delta (600 in this case).
2. Rolling calls and puts, instead of just puts) can be an effective way to reset the delta, I had 65% decay in the calls, so decided to take the profit and roll them out. My delta is now 77 instead of 350.
3. I had been planning on doing this adjustment tomorrow after NFP, with the thought that volatility would decrease. However vol has been steadily rising in CMCSA, and with that high position delta I wanted to get some better risk control on.
4. There are no divs left in CMCSA this year, so not a consideration
5. Crash protection with 43 puts

#SueCollar TGT adjustment

Here’s the opening trade I did on Oct 15:
TGT
Bought 300 shares @ 111.84
Bought 3 Nov 8 110 put @ 1.65
Sold 3 Nov 29 112 Call @ 4.70

Whenever the puts are over a double, I look to adjust and take that profit, lowering cost basis.

Here’s my adjustment:
1. Sold 3 Nov 8 110 puts @ $3.84 ($657 profit)
2. Bot 3 Nov 29 112 Call @ 1.71 ($897 profit)
3. Bot 3 Nov 15 105 puts @ 1.31
4. Sold 3 Dec 13 106 calls @ 4.45

Thought process:
–Puts had more than doubled, calls had decayed over 60%. That’s what I like about this structure, the gamma in the short-dated puts can really cause a big move, yet the long dated calls still have really nice decay.
–Normally I would have bought Nov 22 puts, but that is earnings week and the puts are too expensive for me that week
–TGT dividend is the day before earnings, my short calls should have very adequate premium in them to be able to sustain a move up into earnings but still collect the dividend (.66).
–The math on this can be simple or complicated. Doing the simple math, my net debits and credits now across all options trades is $2496 credit, divided by 300 shares = $8.32 in cost basis reduction. That takes me to 103.52 for cost basis on shares purchased at 111.84. Obviously all of that cost basis reduction is not yet realized, and will change with the next adjustment—so $103.52 is “blue sky” at this point.
–I chose the Dec 13 calls to sell based on the dollar-strikes, I like to get right ATM
–I’m crash protected with the 105 puts.