Sunday, August 28, 2011

Bull Call Spread (29 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).  

VXX  $41.07
Buy to Open (1) Sep 11 35 C @ $7.25
Sell to Open (1) Sep 11 40 C @ $4.15 
Net Debit: $3.10 ($310.00)
Breakeven: $38.10
Max. Profit: $190.00
Pct Return: 61.3% (19 days)

GLD  $177.47
Buy to Open (1) Sep 11 172 C @ $8.50
Sell to Open (1) Sep 11 177 C @ $5.55 
Net Debit: $2.95 ($295.00)
Breakeven: $174.95
Max. Profit: $205.00
Pct Return: 69.5% (19 days)

TLT  $108.49
Buy to Open (1) Sep 11 104 C @ $5.15
Sell to Open (1) Sep 11 109 C @ $2.08 
Net Debit: $3.07 ($307.00)
Breakeven: $107.07
Max. Profit: $193.00
Pct Return: 62.9% (19 days)

GDX  $62.48
Buy to Open (1) Sep 11 59 C @ $4.50
Sell to Open (1) Sep 11 64 C @ $1.45 
Net Debit: $3.05 ($305.00)
Breakeven: $62.05
Max. Profit: $195.00
Pct Return: 63.9% (19 days)

SLV  $40.41
Buy to Open (1) Sep 11 37 C @ $4.00
Sell to Open (1) Sep 11 42 C @ $1.09 
Net Debit: $2.91 ($291.00)
Breakeven: $39.91
Max. Profit: $209.00
Pct Return: 71.8% (19 days)

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

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