Traded on 12/4/07 at 3:03pm
Bought Apr 100 Call for $25.80 & sold Dec 125 Call for $2.40
Total cost basis= $23.40 per share or $2,345.90 total w/ commissions
Max Profit (in ~2 weeks):
If called out: $1.60 (Diff. between strikes minus cost basis)/$23.40 (cost basis) = 6.8% ROI
If not called out: $ 2.40 (credit)/$25.80 (debit) = 9.3% ROI
Max Loss:
Stop Loss ordered for $18.72 on 12/4/07 ($4.68 actual max loss= 20% from debit of $23.40)
Exit: If not called out, ~ 1 week before expiration, I will buy back the Dec and sell a Jan call to minimize total cost of trade even further.
Bullish trend with neutral candle today and slight weakness on ATR ($ price change of stock) indicator at bottom of chart. Support at 111 with stock at one year high. As long as stock stays below 125 I won't get called out and can roll into next month. If I get called out, I still make a great ROI (6.8% and have protected myself with portioning the trade to the portfolio size as well as setting my stop loss).
Happy trading!
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