Company Name – Sodastream
TICKER – SODA
MY OPINION (JUST MY THOUGHTS, NOT ADVICE) – Sell the news
STRATEGY USED – Short Call Spread
My Thoughts On
I found out, thanks to FINVIZ.com, that PepsiCo is buying all of Sodastream’s stock at $144 a share. From what I read, it is a done deal. So there isn’t any point in paying more than $144.
For some reason, the stock is around $142 and some change. So I wondered if anybody was buying any options, and I opened up my Tastyworks account to look.
I saw that the October 145/150 call spread was going for 75, and the January 2020 145/150 call spread was going for 80, so I just said what the heck, and sold them to open.
Seems like easy money to me, and that’s my favorite kind of money. I don’t see SODA going above $144, since PepsiCo is telling everybody they are buying it all up. So as long as SODA stays below my short strikes of $145, I get to keep all of my premium.
If for some reason, and I don’t see how, SODA goes above $150, I will have to pay $500, twice, and will lose $1000.
This seemed like a no brainer, and every once in a while, Mr Market is asleep at the wheel. But do your due diligence before you make any trades, and remember, I am not a financial adviser, and you may lose money on the stock markets.
What do you think? Let me know below. Thanks.