Monday, July 4, 2011

Bull Call Spread (4 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).   

SPY $133.92
Buy to Open (1) Aug 11 132 C @ $4.11
Sell to Open (1) Aug 11 137 C @ $1.30 
Net Debit: $2.81 ($281.00)
Breakeven: $134.81
Max. Profit: $219.00
Pct Return: 77.9% (46 days)

DIA $125.58
Buy to Open (1) Aug 11 123 C @ $4.05
Sell to Open (1) Aug 11 128 C @ $1.09 
Net Debit: $2.96 ($296.00)
Breakeven: $125.96
Max. Profit: $204.00
Pct Return: 68.9% (46 days)

IWM $84.09
Buy to Open (1) Aug 11 81 C @ $4.25
Sell to Open (1) Aug 11 86 C @ $1.28 
Net Debit: $2.97 ($297.00)
Breakeven: $83.97
Max. Profit: $203.00
Pct Return: 68.4% (46 days)

XLE $76.06
Buy to Open (1) Aug 11 73 C @ $4.35
Sell to Open (1) Aug 11 78 C @ $1.35 
Net Debit: $3.00 ($300.00)
Breakeven: $76.00
Max. Profit: $200.00
Pct Return: 66.7% (46 days)

QQQ $57.91
Buy to Open (1) Aug 11 55 C @ $3.47
Sell to Open (1) Aug 11 60 C @ $0.41 
Net Debit: $3.06 ($306.00)
Breakeven: $58.06
Max. Profit: $194.00
Pct Return: 63.4% (46 days)

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

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