Based on a 155.30 rally target disseminated here on May 6, we bought four June 152 puts yesterday for 1.00 with DIA topping at 155.14. Since I advised closing out two of them for 1.14 intraday, we are left with a profit-adjusted position of two puts whose cost basis has been reduced to 0.86. Now, offer an additional put on the opening and hold the remaining put as a lottery ticket. ______ UPDATE (12:25 p.m. EDT): The puts opened for 2.30, so the sale of one more would leave you with a single put whose costs basis, adjusted for gain so far, is a 1.44 CREDIT. Thus, a profit of $144 is the worst this trade can do no matter what happens to DIA. For now, do nothing further. _______ UPDATE (June 3): Offer one June 147 put short for 1.06, good-till-canceled. If the order fills, we’ll have a risk-free lock on a $250 profit no matter what DIA does, and a shot at $750 if stocks fall hard this month. _______ UPDATE (June 6, 2:29 a.m.): Lower the offer on the short June 147 put to 0.54, day order. Intraday note: The puts opened for 1.15, so we were able to lock in a $5 spread for a $2.59 CREDIT. This means that the worst we can do is make $259 on the trade; and the best, with DIA trading 147.00 or lower on June 21, is make $759.
