Saturday, August 13, 2011

Bull Call Spread (15 Aug 11)

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  $118.12
Buy to Open (1) Sep 11 116 C @ $6.12
Sell to Open (1) Sep 11 121 C @ $3.00 
Net Debit: $3.12 ($312.00)
Breakeven: $119.12
Max. Profit: $188.00
Pct Return: 60.3% (34 days)

IWM  $69.79
Buy to Open (1) Sep 11 67 C @ $5.29
Sell to Open (1) Sep 11 72 C @ $2.19 
Net Debit: $3.10 ($310.00)
Breakeven: $70.10
Max. Profit: $190.00
Pct Return: 61.3% (34 days)

XLE  $66.96
Buy to Open (1) Sep 11 65 C @ $4.70
Sell to Open (1) Sep 11 70 C @ $1.68 
Net Debit: $3.02 ($302.00)
Breakeven: $68.02
Max. Profit: $198.00
Pct Return: 65.6% (34 days)

EWZ  $61.35
Buy to Open (1) Sep 11 59 C @ $4.70
Sell to Open (1) Sep 11 64 C @ $1.69 
Net Debit: $3.01 ($301.00)
Breakeven: $62.01
Max. Profit: $199.00
Pct Return: 66.1% (34 days)

IYR  $54.69
Buy to Open (1) Sep 11 52 C @ $4.30
Sell to Open (1) Sep 11 57 C @ $1.34 
Net Debit: $2.96 ($296.00)
Breakeven: $54.96
Max. Profit: $204.00
Pct Return: 68.9% (34 days)

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

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