Now, getting back to STLA:
Quite the falling knife but, even adjusting guidance down, they make $4/share so 3.5x at this level. Certainly worth a toss in the LTP and I feel good enough to try it for the $700/Month Portfolio as well.
For the $700/Month Portfolio:
-
- I wish we had margin to sell puts but we don’t.
- Buy 3 STLA 2027 $10 calls for $4.90 ($1,470)
- Sell 3 STLA 2026 $15 calls for $1.70 ($510)
That’s net $960 on the $1,500 spread but we’ll be able to roll the short calls in 16 months – hopefully to at least the 2027 $17s and that would give us a $2,100 spread but, for now, it’s a $1,500 spread so we have $540 (56.2%) upside potential at $15+.
For the LTP, much more fun:
-
- Sell 40 STLA 2027 $15 puts for $3 ($12,000)
- Buy 100 STLA 2027 $13 calls for $3 ($30,000)
- Sell 80 STLA 2027 $17 calls for $1.60 ($13,600)
That’s net $4,400 on the $40,000 spread so $35,600 (809%) upside potential at $17 but also we can sell 20 of the Jan 15s for $1 (now 0.70) and that’s $2,000 x 9 quarters is $18,000 bonus Dollars if all goes well – and that’s another 409% upside potential – but not yet…