Sold a XPEV Put/Bought SHW LEAPS

I like Xpeng (XPEV) stock at this price, but instead of buying the shares at $46.50 I decided to sell a Put with the Strike Price of $45.50. If the stock gets put to me at $45.50 I’ll sell Calls against the shares.

I bought 10 XPEV 2/12/21 $45.50 Puts with the strike Price at $1.00 for $1000.

Sell to Open 10 XPEV 2/12/21 $45.50 P @ $1.00 (+$1000)

This trade gets a Risk Factor 2.

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Sherwin Williams (SHW) is a great company. The stock is selling at $725. On 2/3/21 they announced a 3:1 stock split. I’m a little late getting in because the last few weeks I was fully invested. Since the split announcement the stock is up about $25. This stock does not have the  volatility, nor the volume that Apple or Tesla does, so, in no way do I think this split will react the same as the Apple and Tesla splits. SHW will split on 4/1/21.  I’m going to get in with 1 LEAPS option. I bought 1 SHW 1/21/22 $740 Call for a premium of $71 for $7100.

Buy to Open 1 SHW 1/21/22 $740.00 C @ $71.00 

I plan on holding this position until the 1st week in April. On April 1st I’ll have 3 contracts as a result of the 3:1 split.

I think this is a safe trade on a great stock so it gets a Risk Factor 1.

Successful trading,

Steve

The Options Coach