PEAD in WFM

[Steven Place]

After a solid breakout on good earnings, Whole Foods has basically done nothing for the past month and a half.

I expect that to change. Volatility cannot compress for this long without finally seeing some expansion. And because the rend is up, most likely the expansion will happen to the upside.

Here’s the trade:

Buy to open WFM Feb 50 calls at 1.60 or lower.

Close for a loss at a loss of 47.. use 46.84 as a hard stop to reduce stop-run risk.

Scale half at 51.

[Steven Place]

50.94 was hit, that’s close enough to 51 to sell half and reduce risk.

Sell to close half WFM Feb 50 calls at 2.50 or higher.

[Steven Place]

Going to cut the rest loose here… WFM has earnings next week, there’s chatter that Ackman’s getting short, it’s coming into resistance at 55 and it’s getting a touch overbought.

Sell to close WFM Feb 50 calls @ 4.60

[Author]

Posts