I am recommending we close our Expedia (EXPE) spread now and book the loss. The trade is too high-risk to carry through tomorrow’s Federal Reserve announcement.
While we have reduced our net debit by selling spreads, I want to move on from the position and put our capital to better use elsewhere. We may trade the stock again in the new year depending on how the travel sector performs.
Current Stock Price: $93.77
Net Debit: $0.96 (Note that the net debit was incorrectly listed as $0.94 in the previous alert.)
- Buy to close the EXPE Dec Monthly (12/16) 95 Put for around $2.64
- Sell to close the EXPE Dec Monthly (12/16) 90 Put for around $0.72
- Set initial debit limit $1.92, but adjust as needed to close today
Loss: $2.88, or $288 per spread