Monday, September 5, 2011

Bull Call Spread (6 Sep 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  $41.48
Buy to Open (1) Oct 11 35 C @ $8.50
Sell to Open (1) Oct 11 40 C @ $5.45 
Net Debit: $3.05 ($305.00)
Breakeven: $38.05
Max. Profit: $195.00
Pct Return: 63.9% (46 days)

GLD  $183.24
Buy to Open (1) Oct 11 175 C @ $12.15
Sell to Open (1) Oct 11 180 C @ $9.05
Net Debit: $3.10 ($310.00)
Breakeven: $178.10
Max. Profit: $190.00
Pct Return: 61.3% (46 days)

GDX  $64.91
Buy to Open (1) Oct 11 61 C @ $5.85
Sell to Open (1) Oct 11 66 C @ $2.95 
Net Debit: $2.90 ($290.00)
Breakeven: $63.90
Max. Profit: $210.00
Pct Return: 72.4% (46 days)

TLT  $112.51
Buy to Open (1) Oct 11 108 C @ $6.45
Sell to Open (1) Oct 11 113 C @ $3.55 
Net Debit: $2.90 ($290.00)
Breakeven: $110.90
Max. Profit: $210.00
Pct Return: 72.4% (46 days)

SLV  $42.18
Buy to Open (1) Oct 11 38 C @ $5.30
Sell to Open (1) Oct 11 43 C @ $2.38 
Net Debit: $2.92 ($292.00)
Breakeven: $40.92
Max. Profit: $208.00
Pct Return: 71.2% (46 days)

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

No comments:

Post a Comment