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Even as restaurants, bars, concert arenas and theatres gradually reopen, it’s not clear customers will flock to them anytime soon. Fear of the virus is still too great and the threat of a second-wave of infections coming later this year is significant. Jim and Scott revisit UBER as the lack of travel by consumers spells trouble for the gig economy.
In our latest portfolio update, we noted CMG had a small chance of falling below $1,220 by late in the week on June 17. It broke below that level on Monday, rallied on Wednesday, and is falling again today. Since this position will expire on tomorrow (Friday), today or tomorrow morning is a good time to exit this position.
Tesla is facing reduced demand because of inflation and slow growth in the U.S. It will also suffer reduced output because of the pandemic in China, war in Ukraine, and scrambled supply chains. These developments have emerged very recently and have not been fully priced in by markets. Jim and Dan recommend TSLA puts as the best way to take advantage of the coming collapse of its stock price.
We are halfway into our max holding period through July expiration and already have an excellent return on our AAPL puts. Our max value of $10 per contract would be achieved by holding another month and expecting AAPL to close below $135. We think there are better risk/return trades than holding onto this one. Let’s take gains on this position now.
With more consumers staying home while searching for entertainment, streaming services were one of the main business beneficiaries of the COVID pandemic and lockdowns. Now, restrictions are being lifted and customers are breaking out of their quarantine cocoons and seeking live venues to spend their time and money. Jim and Dan expect this leading streaming service to struggle as increased competition and slower growth brings down its stock price in the coming weeks.
