Sunday, July 24, 2011

Bull Call Spread (25 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).   

OIH $151.53
Buy to Open (1) Aug 11 158 C @ $6.95
Sell to Open (1) Aug 11 163 C @ $3.85 
Net Debit: $3.10 ($310.00)
Breakeven: $161.10
Max. Profit: $190.00
Pct Return: 61.3% (27 days)

GLD $156.12
Buy to Open (1) Aug 11 152 C @ $5.30
Sell to Open (1) Aug 11 157 C @ $2.29 
Net Debit: $3.01 ($301.00)
Breakeven: $155.01
Max. Profit: $199.00
Pct Return: 66.1% (27 days)

IVV $135.05
Buy to Open (1) Aug 11 133 C @ $3.70
Sell to Open (1) Aug 11 138 C @ $0.80 
Net Debit: $2.90 ($290.00)
Breakeven: $135.90
Max. Profit: $210.00
Pct Return: 72.4% (27 days)

SPY $134.58
Buy to Open (1) Aug 11 132 C @ $4.07
Sell to Open (1) Aug 11 137 C @ $1.12 
Net Debit: $2.95 ($295.00)
Breakeven: $134.95
Max. Profit: $205.00
Pct Return: 69.5% (27 days)

DIA $126.60
Buy to Open (1) Aug 11 124 C @ $3.75
Sell to Open (1) Aug 11 129 C @ $0.80 
Net Debit: $2.95 ($295.00)
Breakeven: $126.95
Max. Profit: $205.00
Pct Return: 69.5% (27 days)

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

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