Sold a Rare Put With SFIX

While looking at some charts today I came across Stitch Fix (SFIX). Since I never traded this stock before I’ll fill you in on what the company does. Stitch Fix,  is an online personalized styling service company. The Company offers apparel, shoes and accessories across categories, brands, product types and price points. The Company serves its clients in the following categories: Women’s, Petite, Maternity, Men’s and Plus. The Company also offers a wide variety of product types, including denim, dresses, blouses, skirts, shoes, jewelry and handbags. The Company’s data science capabilities fuel business consist of rich and growing set of detailed client and merchandise data and proprietary algorithms. The Company uses data science throughout its business, including prediction of purchase behavior, forecast demand, optimize inventory and design new apparel.

Today, looking at the daily candlestick chart, the stock bounced off it’s 50 Day MA and I think it will stay above. The 100 Day and the 200 Day MA’s are aligned nicely. I think the stock goes up from here so I decided to sell a Put. I sold a Put and not do a Covered Call because I’m trying to cut down on my stock positions going into the election. With the stock at $26.30 I sold 10 10/2/20 $25 Puts. If the stock falls below the $25 Strike Price I’ll have 1000 shares put to me at $25.

Sell to Open 10 SFIX 10/2/20 $25.00 P @ 50¢ (+$500)

If this stock stays above $25 until expiration this Put will expire and I keep my $500 premium. This is what I hope happens.

Successful trading,

Steve

The Options Coach