Long Call (29 Aug 11)

Long Call (ETFs)

A Call option gives the buyer the right to buy stock at a specific price (strike price) on or before a specific date in the future (expiration date).  When you purchase a Call option you are basically betting that the price of the underlying stock will rise.  The Call buyer loses money if the underlying stock does not rise before the expiration date.

VXX  $41.07

Buy to Open (1) Jan 12 42 C @ $8.85 

Net Debit: $8.85 ($885.00)

Profit Target (50%): $13.30 ($1,330.00)

Stop-Loss Point (50%): $4.50 ($450.00) 

GLD  $177.47

Buy to Open (1) Jan 12 180 C @ $11.50 

Net Debit: $11.50 ($1,150.00)

Profit Target (50%): $17.25 ($1,725.00)

Stop-Loss Point (50%): $5.75 ($575.00) 

TLT  $108.49

Buy to Open (1) Jan 12 110 C @ $4.15 

Net Debit: $4.15 ($415.00)

Profit Target (50%): $6.25 ($625.00)

Stop-Loss Point (50%): $2.10 ($210.00)

GDX  $62.48

Buy to Open (1) Jan 12 65 C @ $4.10 

Net Debit: $4.10 ($410.00)

Profit Target (50%): $6.15 ($615.00)

Stop-Loss Point (50%): $2.05 ($205.00)

SLV  $40.41

Buy to Open (1) Jan 12 40 C @ $4.85 

Net Debit: $4.85 ($485.00)

Profit Target (50%): $7.25 ($725.00)

Stop-Loss Point (50%): $2.40 ($240.00)

 

REMEMBER: “When there is a small movement in the stock, there is a magnified movement in the option”.  The “Long Call” strategy can be easily transformed into a “Bull Call Spread”, “Calendar Call Spread”, or “Diagonal Call Spread”.   

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