In late March, I let subscribers know I was buying $ENVA $40 strike calls for June 16 expiration. Full details and explanation of my thinking here: https://deepknowledgeinvesting.com/new-portfolio-position/.
Enova stock rose as expected, and the value of the options rose as well. With just over two weeks to go to expiration, I sold the options today for $7.30. That’s a return of 38% in approximately two months or 226% annually (assuming no compounding).
For those of you who are inexperienced in trading options, don’t worry. This one was an illiquid position and difficult to trade. There is no change in our thesis on the underlying Enova stock, and my position in the stock is unchanged.
As a reminder, short-term options trades are not what you’ll regularly get here at DKI. However, we are creative and adaptable, and when I see a mispriced opportunity, we’ll always try to take advantage of that.
As always, you’re welcome to send questions to IR@DeepKnowledgeInvesting.com. I read all incoming emails personally.