Stock / Symbol: US Steel / X
Option Strategy: [private_monthly]diagonal call spread[/private_monthly]
Trade entry date: Mar 26
Price at trade entry: $29.66
Price at Apr 27 adjustment: $28.32
Price at this adjustment: $18.20
Current Position:[private_monthly]
Long 1 X Jan13 22.5 Call
at an effective cost of $7.90 per contract
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Adjustment: Hopefully you took our advice and stopped yourself out of this one when X dipped thru $27 back on May 4th. As we didn't take our own advice, we're going to add to our position to lower our cost basis and look to exit the trade with a rebound in the stock. With a Delta of .38, we're going to need X to move up over $23 by July expiration to break even on the trade. However, this adjustment has lowered our Jan13 breakeven from $30.40 down to $26.35. With X trading at $23, we may either exit the trade or sell some closer term calls.
If you're new to this trade, this is a good place to buy these long X calls.
Trade Adjustment Details:[private_monthly]
BTO 2 X Jan13 22.5 calls
for a max debit $1.80 per contract (current bid/ask = 1.65 / 1.70, day order, limit order)
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Max Risk: $1,130 (adjusted up from $810)
Max Reward: unlimited
Profit Range: $26.35+ by Jan13 expiration
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