📊 Trade Breakdown: $LEVI – Short Puts into Earnings (Oct 9) Position: Sold 30 × Oct 25 $21 puts Average cost basis (collected premium): $0.18 Current mark: $0.175 (-$0.025 change on the day) Total position value: -$525 Daily P/L: +$15 (+2.78 %) I sold cash-secured puts on Levi Strauss & Co. ahead of its October 9 earnings. The idea was to collect premium on what I view as an over-dispersed volatility event — the stock had been stable around $24–25, and the implied volatility on short-dated puts was elevated into earnings. By selling the $21 strike (roughly 15–20 % below spot), I’m expressing a bullish-neutral view: I’m comfortable owning LEVI shares if the stock drops meaningfully post-earnings. Otherwise, I keep the premium as income if the stock stays above $21 through expiration (Oct 25).
⚙️ Mechanics & Risk/Reward
Each contract represents 100 shares, so 30 contracts = 3,000 shares of exposure.
Credit received: $0.18 × 3,000 = $540
Max profit: $540 (if LEVI ≥ $21 at expiration)
Max risk: Owning 3,000 shares at an effective basis of $21 – 0.18 = $20.82
Capital required: ≈ $62,460 (if cash-secured)
Essentially, I’m getting paid to potentially buy LEVI 10–15 % below current levels, while letting time decay and post-earnings IV crush work in my favor.
🔍 Why I Like This Setup
Fundamentally sound brand with resilient cash flows and steady dividend.
Earnings volatility priced high relative to historical post-earnings moves.
Defined risk and high odds of expiration worthless.
Willingness to own the stock at a discount.
🧭 Next Steps
If LEVI stays above $22 through earnings, I’ll likely close the trade early for 50–60 % of max profit to lock in time decay. If shares drop post-earnings but hold above $21, I’ll hold to expiration. Should it break below $21, I may roll the puts out a month or take assignment and turn it into a covered call.
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