October 22.50 Put Option Price: $1.30
Today we sold four GameStop October 22.50 puts for $130 each. We will reserve the $9,000 cash required to make the purchase of 400 GameStop shares if exercised. We believe that an effective purchase price of GameStop at $21.20 per share would result in market beating returns over the next several years as both the video game industry grows and the american consumer returns. Like our sale of Nike puts, in the event the puts are exercised we will post a thorough analysis of this investment. If the puts are not exercised, we will receive a roughly 5.8% real return, or 35%+ IRR on our $9,000 in reserved cash.
3 comments:
I enjoy reading your blog. Any plans to post detailed write ups for put sales (i.e., the rationale for owning the underlying security)?
Thanks for the comment Roman. We've gone back and forth on this but ultimately decided we'd rather do a full write up on the reason for owning the underlying security only if the puts get exercised.
Fair enough. I will keep waiting. I really enjoy reading your blog. Keep up the great work!
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