On our last post about Beyond Meat (BYND), it was about netting all the possible returns that could be generated from the release of earnings. What we quickly realized is that earnings was an excuse for thousands of investors to cash out and reallocate funds out of the stock.
Its been a month now and we’re looking to reestablish a position in BYND that could generate considerable credit into our account over the next several weeks. I believe the next several weeks for Beyond Meat will be a time of consolidation between price areas of 185 and 120. For security, we always want to position ourselves with to have some security on either side of the trade. The lockout period officially ends of October 29th, which also happens to be an earnings release.
I have no doubt that unsuspecting buyers will be overrun with sellers!
Here’s the trade
We will Buy the November 15th 205 Call and Sell The 200 Call.
We will Buy the November 15th 105 Put and Sell The 110 Put.
Here’s how it looks at two options.
The Poor Man’s Version.. Shorter Time Frame
We will Buy the October 25th 195 Call and Sell The 192.50 Call.
We will Buy the October 25th 105 Put and Sell The 110 Put.
The idea for us is to hold the position for 20 to 25 days and achieve 50% of max value. At that time, we could reassess where the stock is trading at then make the appropriate determination of the change.
The stock is highly volatile and always can make traders a little uncomfortable particularly in the first 7 days. This is one of those trades you want to set it and forget it. The breakout above 175 is the only risk here. The chances are high in the short term (next 7 days) for that happening but I think it subsides as we get out of this month. The idea is the absorb the current volatility and use that to your advantage while you still have the ability to do so. Traders looking for serious profits are running out of time to enjoy beyond meat. This could be the last time you see volatility like this.