Sunday, July 17, 2011

Bull Call Spread (18 Jul 11)

TO ALL:

Here are the “potential trades” for next week:

Bull Call Spread (ETFs)

A Bull Call spread is a debit spread created by purchasing a Call with a lower strike price and selling a Call with a higher strike price.  Both options expire in the same month.  This is a bullish strategy and should be implemented when you expect the market to close above the strike price of the short Call option—the point of maximum reward (at expiration).   

GLD $155.20
Buy to Open (1) Aug 11 151 C @ $5.70
Sell to Open (1) Aug 11 156 C @ $2.77 
Net Debit: $2.93 ($293.00)
Breakeven: $153.93
Max. Profit: $207.00
Pct Return: 70.7% (33 days)

SPY $131.69
Buy to Open (1) Aug 11 130 C @ $4.07
Sell to Open (1) Aug 11 135 C @ $1.19 
Net Debit: $2.88 ($288.00)
Breakeven: $132.88
Max. Profit: $212.00
Pct Return: 73.6% (33 days)

DIA $124.56
Buy to Open (1) Aug 11 123 C @ $3.55
Sell to Open (1) Aug 11 128 C @ $0.76 
Net Debit: $2.79 ($279.00)
Breakeven: $125.79
Max. Profit: $221.00
Pct Return: 79.2% (33 days)

TLT $96.17
Buy to Open (1) Aug 11 93 C @ $3.55
Sell to Open (1) Aug 11 98 C @ $0.76 
Net Debit: $2.79 ($279.00)
Breakeven: $95.79
Max. Profit: $221.00
Pct Return: 79.2% (33 days)

IWM $82.81
Buy to Open (1) Aug 11 80 C @ $4.27
Sell to Open (1) Aug 11 85 C @ $1.20 
Net Debit: $3.07 ($307.00)
Breakeven: $83.07
Max. Profit: $193.00
Pct Return: 62.9% (33 days)

All positions displayed are for educational purposes only and are not intended to be recommendations.

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