Our Ocular Call Is Set to Expire as Market Struggles
Markets are struggling yet again on Friday. The portfolio, as readers can see, is down to about $92 in cash. Hence, I am kind of handcuffed in what I can do right now, unless I sell a few shares of something. Anything.
The problem with that is two-fold. One: I don’t want to sell anything that we already have in inventory. I already sold the more expensive stocks (on a per share basis) that were in the portfolio in preparation for lower stock prices so I could add to our core positions. That cash has now almost entirely been deployed.
Secondly, while this is a margin account where I can short stocks and write options, I don’t want to set the example of buying equities on margin for our readers. Sure, there are times when it might make sense to do so. However, in a $10,000 portfolio where the folks who read us might be following along and perhaps trading with our moves, others might not have access to a lot of dough. Maybe they just don’t like taking on a lot of risk. For those investors, buying equity on margin, especially during periods of increased volatility, is to invite possible trouble.
If I were willing to add some cash to the portfolio or make purchases on margin, or if I just made clear what I might do for the Sarge-folio on Friday, I would very likely add more size to the long position in Ondas Inc ($ONDS). I might also bring SoFi Technologies ($SOFI) and Evolv Technologies ($EVLV) up to round numbers.
What I Am Going to Do
Nothing.
That, however, does not mean that the portfolio will not change at all by Monday morning. We have one covered call contract in Ocular Therapeutix ($OCUL) expiring on Friday evening. That would be the July 17 $9 call. Should OCUL close below $9, that call will expire worthless and we’ll take our $0.90 profit passively.
On the other hand, should OCUL close tonight above $9, we will be called away on 100 shares at $9. With what we sold the call for, it would be a net $9.90. The shares are currently trading around $9.10. Anyone of us would be happy to sell something worth $9.10 for $9.90, so that would not bother me at all. It just means that we actually won a round. Additionally, this would also create some much-needed cash for next week.
Portfolio News
Smith & Wesson Brands ($SWBI)
On Friday morning, analyst Mark Smith of Lake Street reiterated his “buy” rating on SWBI along with his $16.50 target price. Smith is rated at 3.5 stars out of five by TipRanks. Over the past two years, he has a 46% success rate and has generated an average return of 4.4%.
Thursday’s Intentions vs Thursday’s Actual Trades
Intention: Purchase 10 shares of ($INSG) at or close to the last sale of $7.49
Actual trade: Bought 10 shares of INSG at $7.46
Intention: Purchase 25 shares of ($RXT) at or close to the last sale of $4.11
Actual trade: Bought 25 shares of RXT at $4.08.
Friday’s Intentions
Allow, if it happens, the portfolio to be called away on 100 shares of OCUL, at $9.
Current Positions
Long 150 shares of ($ALTO) at $5.51. Target price: $8. Last sale: $5.64.
Long 80 shares of EVLV at $5.8959. Target price: $8.50. Last sale: $5.63.
Long 40 shares of INSG at $8.2863. Target price: $11. Last sale: $7.61.
Long 200 shares of ($OCUL) at $8.271. Target price: $11. Last sale: $9.13.
Short one OCUL $11 September 18 call at $1.65. Last sale: $0.22.
Short one OCUL $9 July 17 call at $0.90. Last sale: $1.28.
Long 300 shares of ONDS at $8.6489. Target price: $14. Last sale: $6.38.
Long 30 shares of ($PL) at $27.0367. Target price: $46. Last sale: $22.28.
Long 60 shares of RXT at $6.4529. No target price. Last sale: $4.10.
Long 145 shares of SOFI at $15.9559. Target price: $24. Last sale: $16.94.
Short one SOFI August 21 $20 call at $1.02. Last sale: $0.49.
Long 30 shares of SWBI at $15.74. Target price: $19. Last sale: $14.99.
Long 70 shares of ($VELO) at $13.4723. Target price: $18. Last sale: $10.39.
Cash: $92.67.
Portfolio Value: $9,794.13, -2.1% from inception on March 24.
At the time of publication, Guifloyle was long ALTO, EVLV, INSG, OCUL, ONDS, PL, RXT, SOFI, SWBI and VELO.
