2/11 Recap

The SPY is simply in wait and see mode until CPI tomorrow. No sense in trying to make sense of what is coming until we get the numbers tomorrow. I would say if you’re worried, lighten up the short term trades you’re in because we will move alot tomorrow. A 2% move down and we break the 100 day and open the door to retest the breakout at 565, but if things are good tomorrow, it is likely we make new all time highs by the end of the week. Be prepared for all possible outcomes.

Recent Trades

NET - I wrote up Cloudflare as a weekend best idea in late November here. At the time I suggested a few various trades one of which was a January 2026 risk reversal selling puts at 90 to buy calls at 140. At the time Cloudflare was 104.xx and today it sits at $174.xx This has been a monster move and that risk reversal that was a .30 credit at the time is now worth $52 if you wanted to close it. Pretty insane trade if you placed it, so keep this trade in the back of your mind when you’re thinking about the SHOP trade I drew up over the weekend. If and when you get that powerful move, these risk reversals can print a ton of money.

My Open Book

Nothing material today, not much to report, just sitting around waiting for some things to fall to me, you’ll notice SHOP is up $1 after earnings and the short puts I sold yesterday are up over 11%. That is the beauty of selling premium, that IV comes out and you don’t need much to turn a trade profitable.

You’ll also notice I filled the call spread on SHOP that I mentioned the other day. So what I did because I couldn’t fill the trade for a credit which is always my goal and since SHOP is de-risked post earnings, I just sold more short puts and now have an uneven 150/100 trade where I have way more short puts than long calls. That’s ok, you have to adjust the trades to fit what your goals are and for me it is always a trade that pays me to put it on. So right now, I don’t really care what Shopify does as long as it stays over 80.