Rocket - SFIX Options Trade 03-08-21
Stitch Fix - Selling a Credit Call Spread
SFIX with earnings after the bell tonight and options are pricing in a huge move, with an $11.37 move priced into an $71.37 stock.
We are going bearish this equity and will look to absorb some premium just above the current price. They've had quite a run so far this year, but as is often the case it may be tough to continue the rise and live up to expectations when they do all their business online and will face some headwinds as people want to go back to real stores as economy opens back up. People will need more clothes once we go back to work and our normal lives, but they are priced for extreme growth and will have to deliver in a big way tonight to trade higher.
We are going bearish this equity and will look to absorb some premium just above the current price. They've had quite a run so far this year, but as is often the case it may be tough to continue the rise and live up to expectations when they do all their business online and will face some headwinds as people want to go back to real stores as economy opens back up. People will need more clothes once we go back to work and our normal lives, but they are priced for extreme growth and will have to deliver in a big way tonight to trade higher.
Both legs expire Friday March 12th
Selling the SFIX $73 call
Buying the SFIX $74 call
This should result in a credit of about $0.45. Don't get less than $0.40 credit for this trade. Our max profit is $45 and our max loss is $55 per pair.
The price of SFIX just dropped from $71 to $70 as I wrote this update - so we may not get filled - but get your order in and if it bounces then we'll take the trade.
Buying the SFIX $74 call
This should result in a credit of about $0.45. Don't get less than $0.40 credit for this trade. Our max profit is $45 and our max loss is $55 per pair.
The price of SFIX just dropped from $71 to $70 as I wrote this update - so we may not get filled - but get your order in and if it bounces then we'll take the trade.
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