Bullish $ENPH Put Spread – Closed for 13% ROI

On 10/13/21 Bought to Close this spread for a $72 debit, leaving us with a profit of 13% ROI. 
enph
 

What’s the trade?

Money Vikings are bullish on Enphase, the company that makes microinverters for solar panels, and home battery backup-solutions. Having just broke above the 200 day moving average with an upwardly trending RSI and a bullish MACD cross-over, we like the opportunity for premium selling strategies with a decent IVR of 25%. This vertical put spread expires in 36 days, and we could theoretically collect up to $120 on expiration as long as ENPH stays where it is, or above 140.

With ENPH trading at 157 on 10/7:

  • Buy the Nov 12 135 Put
  • Sell the Nov 12 140 Put
  • Premium: Try to collect around $120
  • Rationale: This is a defined risk trade with a max loss of around $380 and a max profit of around $120. The plan is to exit once we hit 25%-50% of the premium received, prior to the 10/26 earnings event.
  • Probability of making 60$: 74%
  • Assumption: Neutral to Bullish
  • Timeframe: 2 to 4 weeks.

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