Stock Symbol: APPL
Option Strategy: Call Spread
Reasoning: Looking like AAPL doesn't want to move much higher from here and is in risk of pulling back next week. If we close our position here, we can lock in a nice 18% gain.
Trade Details (updated 9/4/10 to reflect actual trade in our brokerage account):
STC 1 AAPL OCT10 230 CALL @ $27.51 = $2,750.94
BTC 1 AAPL OCT10 250 CALL @ $12.41 = ($1,241.01)
Proceeds: $1,509.93
Cost: $1,280.05
Profit: $229.88
Total Trade Commission: ( $25.90)
Net Profit = $235
Return = 18.36%
Net after commissions: $203.98
Net Return = 15.94%
Chart:
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Can you explain where the profit of $235 came in with the $1500 net loss of the call? Thanks
Good catch, I obviously entered in the trade details incorrectly. Here is a copy of the whole trade as displayed by our broker (OptionsXpress). Note, the total gain includes commissions, the pre-commission gain was $229.88
Trade Date Action Symbol/Desc. Qty Price Comm. Net Amount Gain/Loss for symbol
APPLE
09/03/2010 STC AAPL Oct10 230 Call 1 $27.51 $6.47 $2,744.47
08/16/2010 BTO AAPL Oct10 230 Call 1 $25.66 $6.48 ($2,572.49) 171.98
09/03/2010 BTC AAPL Oct10 250 Call 1 $12.41 $6.48 ($1,247.49)
08/16/2010 STO AAPL Oct10 250 Call 1 $12.86 $6.47 $1,279.49 $32.00
Total Realized Gain/Loss for AAPL $203.98