Stock / Symbol: S&P 500 INDEX / SPX
Price at trade post: $1349.90
Option Strategy: [private_monthly]bear call spread[/private_monthly]
Reasoning: We are expecting the SPX to [private_monthly]continue a bit higher from here, but then peter out at the 1400 level. This trade enables us to profit as long as the S&P stays under 1415 by Mar 16. If the market pulls back to the 1300 level during the trade, we'll look to ad a put credit spread, making this trade an iron condor. This trade has a 89% probability of success as it allows the S&P to rise another 4.8% and still be profitable. We're setting a stop at 1401, at which time we'll either exit the trade or adjust it to protect against a further move higher.
[/private_monthly]
Max Risk: $890
Max Reward: $110 or 12% by Mar 16
Profit Range: $0 - $1415
Suggested Stop @: $1401
Trade Details:
STO -2 SPX Mar12 1415 calls
BTO 2 SPX Mar12 1420 calls
for a net credit of $0.55 per contract (GTC, limit order)
Requirements
Cost/Proceeds ($55.00)
Option Requirement $1,000.00
Total Requirements $890.00
Estimated Commission $12.95
[/private_monthly]
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