IB Account Week Ending 12/18/20, New High, New Position on BMY

Our IB Account had a good week increasing by 4.23% to $358,143 a new high. MTD Dec is up 9.5%.

Account positions are in the table below. On Friday the monthly and weekly options expired. In the column below under Options we show the trade/position we moved into for next week/month. ATEC, BCRX, DXCM and STE are monthly options so the diagonal trades changed our positions from Dec 18 expiry to Jan 15 expiry. The positions are carrying an unrealized gain of $101,089.

Last week we opened a new position on BMY. We are bullish on the stock and looking to capture the upcoming $.49 dividend. We were aggressive in setting up the initial position. We purchased the stock at $61.52, and sold Dec 24 $65 Calls for $.11 to establish the covered call. We also bought a Dec 24 $63/$65 Bull Call Spread (looking to make a profit on the stock rising and closing at $63+ at expiry on Dec 24) and sold a Dec 24 $62 Put (looking to generate profit by capturing $1.08 premium if the stock stays above $62….with the risk of having to purchase more BMY shares if the stock were to go below $62).

On Friday we closed the Bull Call Spread selling the Dec 24 $63 Calls and buying back the Dec 24 $65 Calls making a small profit on the position. Goldman Sachs had upgraded BMY and increased the target price from $82 to $86 which made us comfortable with the bull call spread strategy anticipating the stock would run up. When the run up seemed to stall on Friday we closed the bull call spread.

If the three days the position has been open we generated a mostly unrealized profit of $734, a return of 4% or 484% annualized so far.

REGN Bull Call Spread……a challenge so far

On Oct 12 we established a BuCS on REGN purchasing May 21 2021 $600 Calls and selling Oct 16 2020 $620 Calls. Within a couple days of establishing the position the price of REGN deteriorated and has continued to remain down despite a couple of bounces. We rolled our short option position 9 times generating $10,131 in premiums but not enough to offset the $15,125 loss on the long call.

We remain optimistic on the position. Not sure why the stock hasn’t recovered more. Covid cases on a global basis are hitting record daily highs and REGN has one of the only proven treatments. Vaccines will eventually help contain the virus but a lot of opportunity exists for REGN in the interim period.