What a difference a day makes. When we sold our puts on Microsoft Corp. (MSFT) yesterday, Apple Inc. (AAPL) hadn't shocked the market with better-than-expected earnings and the largest-ever share buyback announcement – $110 billion.
Today, MSFT – along with the rest of the market – is soaring higher.
This bullish move in MSFT has wiped out nearly two-thirds of the value of the puts we sold yesterday, and we think it's time to cash in by exiting the trade.
Buying the puts back before expiration will allow us to keep most of the potential profits while avoiding the risk of exercise in May. That will free up additional capital that can be reallocated to a new position in the short term.
We recommend you...
Buy to close the MSFT May 17, 2024 $390 Puts (MSFT240517P00390000) with a limit order at the current price.
At the time this alert was written, the puts were trading for $1.68.
For traders who entered a short vertical put spread, we recommend the following...
Buy to close the MSFT May 17, 2024 $390 Puts (MSFT240517P00390000) with a limit order at the current price.
Sell to close the MSFT May 17, 2024 $375 Puts (MSFT240517P00375000) for the highest price available.
Charging Forward with A.I. On Our Side
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Sincerely,
John Jagerson & Wade Hansen Analysts, Predictive Alpha Options
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