Special Trade Alert: Roll Your ELF Puts and Close Your GE Puts

Constant Cash Flow members have an open put option trade on the elf Beauty Inc. (ELF) Apr. 19, 2024, $160 put. While there are still 10 days until expiration, ELF stock, which is trading around $168, is uncomfortably close to the strike price.

So, it makes sense to roll the option out two weeks and down to a lower strike price. In the process, you'll earn additional premium income on the trade.

Also, we have an open trade on the General Electric (GE) Apr. 19, 2024, $155 put. Due to the recent spinoff of its energy business into GE Vernova (GEV), this options contract was reclassified as delisted in our system. But rest assured the option continues to trade with a different ticker symbol. The Options Clearing Corp. (OCC) has decided that the previous GE options should now use "GE1" as their stock symbol.

This option is currently quoted at $0.15, which is roughly a $38 profit from our entry price of $0.53 when we sold to open this put option. It also makes sense to close it now ahead of time.

Here's what to do.

Actions to Take:

1. Buy to close the elf Beauty Inc. (ELF) Apr. 19, 2024, $160 put option (ELF240419P00160000), and at the same time sell to open the elf Beauty Inc. (ELF) May 3, 2024, $155 put option (ELF240503P00155000) for a net credit of $0.50 or more, good 'til canceled.

Note: Aim to buy back the existing ELF put option for about $3.50 or less and sell the new put for $4 or more, resulting in a $50 net credit. Consider adjusting these limit prices by a few cents if needed to get filled on the trade.

2. Buy to close the General Electric (GE) Apr. 19, 2024, $155 put at market.

Note: The original ticker symbol for this option was GE240419P00155000, but post-spinoff, you might see it in your portfolio as GE1240419P155.

Consider placing these trades right away and keep watch for more updates and trade alerts.

Good investing,

Mike Burnick
Senior Analyst, Constant Cash Flow

P.S. If you have any questions or concerns, please reach out to me at emailmikeburnick@tradesmith.com and include "Constant Cash Flow" in the subject line.

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