HAS – Pop, Drop, and Chop

[Peavey]

Buying a few HAS JUL 70 calls. Planning to exit half at the 74.75 high from a month ago, and let the rest run some. Stop under the strong support at 70.

Here is Steve’s opinion when I asked about this trade in chat.
“classic pop drop and chop pattern
odds are this goes higher. combination of post earnings drift and a month long base after a good earnings reaction
because it’s a grind
and kind of a low-beta stock
consider in the money calls
maybe the jul 70 calls”

Things I am not sure I like about this trade:
– stop seems pretty far away. The lows at 71.35 on a 30 minute chart look like they also might be a good spot for a stop, but is that too close?
– For a potential slow-mover like this, having a straight call instead of a spread of some kind is a bummer. Is there a spread that would work better here?

[Steven Place]

Don’t worry too much about having a straight call, at least for now. Because the 70 call is in the money, and because the implied volatility is pretty low, you don’t have to worry much about theta risk.

[Peavey]

Nice pop today for HAS. Target met for first half. Looking to exit the rest in the 77-78 area, depending on how action goes.

[Peavey]

Sold the second half of this position. Initial purchase was $3.60, first sale at $4.70, second sale at $8.40. I think that’s an ROI of 82% if I did my math right. Not bad.

[Author]

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