Stock Symbol: GE
Option Strategy: butterfly call spread
Action / Analysis: With its earnings release, GE did make a fairly significant move down but not quite enough for us to realize the maximum profits from the trade. Because it looks like GE will close above $16, we're going to buy back our short 16 strike calls. Also, because it wont add to the commission, we'll also sell the 17 strike calls to bring in a few extra dollars.
Trade Details:
BTC -3 GE Oct10 16 Call @ $.33 ($99)
STC 6 GE Oct10 17 Call @ $0.01 $6
Cost/Proceeds $93
Estimated Commission $15.00
Profit: $57
Max Risk: $141
Gross Return: 40%
Net Return (after commissions): 12%
Chart:
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