New Trades: Long: SQ Oct $90 Call (trading around $4.75) Short: PXD Oct $170 Put (trading around $4.20) Note: Nov expirations SQ and PXD will not be available until next week, so we are sticking with October on these two trades. Specific Stock Advice - TRLY and MJ Tilray (TLRY) is a Canadian marijuana company whose stock has soared from $25 a month ago to a high of $300 yesterday before settling back to $175 at the close. Their annual revenue is about $28M. Their market cap is about $16B. In the course of all this volatility yesterday, the shares were halted 5 times. TLRY's puts are very expensive, an October at-the-money ($175) put is trading at $65, which is about 1/3 of the price of the stock. Enter MJ, an ETF of marijuana stocks. It's largest holding is TLRY representing 14% of the $457M fund. Mostly on the back of TLRY, MJ is up about 40% since mid-August when TLRY started its 1100% one-month romp. The MJ October at-the-money ($42) put is trading at $5.00, still high by normal measurements, but not crazy high like TLRY puts. If TRLY stumbles, the whole sector stumbles...or worse. A less risky way of shorting TLRY (and therefore the entire sector), even for just a quick 20% fall in TLRY, is to buy the MJ at or near the money puts, either October or November. The is not a system triggered trade, it's not even a recommended trade, it's simply a mix of logic and speculation in the midst some high times in the weed industry. TRADE PERFORMANCE The September expiration series comes off of the board tomorrow (Friday). Several of these trades have reached outstanding returns during their life, although that is of little consequence to any trades that were closed at much lower profit taking profits. Trades that generate outstanding returns will continue, but on a trade-to-trade basis we will never know which ones in advance. The best way to participate in those 200%+ winners is to leave a small position on when exiting at your designated profit targets. At the end of the year, those monstrous gains, although only on a small portion of your initial investment, will add up and should easily offset any losses generated with the 60% stop-loss rule.
