This post is restricted to paying members. To follow are open trade adjustment details:
Stock / Symbol: Canopy Growth Corp / CGC
Strategy: Diagonal Call Spread
Trade entry date / price: 18 Apr 2021 / $27.80
Price at this post: $16.20
Update / Reasoning: With CGC now down 42% from where it was at this position's entry, a major adjustment is in order. So, I'm going to close out the 2 long 25 strike calls and go long a single 15 strike call that expires in 2023. To reduce costs and keep the position's theta positive, I'm also selling a Nov21 25 call and a Nov21 12.5/10 put spread. These adjustments will increase the max risk from $890 to $1,135. After this adjustment, the net position Greeks will be approximately: 67.5 Delta, -3.8 Gamma, 0.80 Theta, and 4.3 Vega. In order to get back to even on this trade, this position will need to be held to Nov expiration and CGC will need to be between $24.80 and $26.50 by then.
Trade Adjustment Order:
First -
STC 2 CGC 21Jan22 25 calls
For a min credit of $0.50 per contract (GTC order, limit order). The mid is currently at a credit of $0.52. I was just filled at $0.51
Then -
BTO 1 CGC 20Jan23 15 call
STO 1 CGC 19Nov21 25 call
For a max net debit of $4.85 per contract (GTC order, limit order). The mid is currently at a debit of $4.75. I was just filled at $4.80
Then -
STO 1 CGC 19Nov21 12.5 put
BTO 1 CGC 19Nov21 10.0 put
For a min net credit of $0.30 per contract (GTC order, limit order). The mid is currently at a credit of $0.36. I was just filled at $0.35.
Analysis:
Max Risk: $1,135 (adjusted up from $890)
Max Reward: $30 or 2.6% with CGC at $25.00 on Nov19th
Profit Range: CGC between $24.80 and $26.50 at market close on Nov 19th
Estimated Commission (round trip): $13.00
Suggested Downside Stop: $12.50
