Aquabounty Long Call Spread/ Short put Spread (AQB)

Initial Trade on February 11th

Long 20x Sep 17th 2021 $7.50/$12.50 Call Spread = $1.27

Short 20x Sep 17th $7.50/$5.00 Call Spread = ($1.35)

Net Cost = ($1.35) + $1.27 = ($0.08)

Call Spread Break Even at Expiration: $7.58

Put Spread Break Even at Expiration: $7.42

Initial Thoughts on Trade

AQB is a salmon farming company that was brought to my attention from a research paper. They recently completed a well under market price secondary for $8.50 a share. The research paper notes that this is a good buying opportunity.

I like this trade because I was able to buy a $5 wide in-the-money call spread and short an only $2.50 wide out-of-the money put spread and still manage to get a credit. I like the risk reward of this trade and there likely won’t be much mid trade management here since all of the long and short strikes have been established.

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