Stock / Symbol: Microsoft / MSFT
Option Strategy: [private_monthly]calendar call spread[/private_monthly]
Trade entry date: Dec 23
Price at trade entry: $25.97
Price at this post: $29.05
Current Position:[private_monthly]
Long 15 MSFT Mar12 26 Calls
Short -12 MSFT Jan12 26 Calls
[/private_monthly]
Adjustment: [private_monthly]
With our short calls well ITM, we could roll them over to -14 JanWk4 29 calls for a profit with MSFT trading over $29 by next Friday, but this would significantly increase our max risk on the trade (by about $3000). Instead, we're going to close out the current position for around a $260 loss and then enter a new position structured to close next Friday. [/private_monthly]
Trade Details:
[private_monthly]
STC 12 MSFT Mar12 26 Calls
BTC -12 MSFT Jan12 26 Calls
for a net credit of $0.05 per contract (day order, limit order)
+
STC 3 MSFT Mar12 26 Calls
for a credit of $3.15 per contract (day order, limit order)
then,
BTO 10 MSFT Mar12 29 Calls
STO - 10 MSFT JanWk4 29 Calls
for a net debit of $0.47 per contract (day order, limit order)
[/private_monthly]
Risk analysis on new position:
Max Risk: $480
Max Reward: $250 or 52% @ $29 by Jan 27
Profit Range: $28.45 - $29.50 by Jan 27
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