Stock / Symbol: PowerShares QQQ / QQQ
Option Strategy: double diagonal
Price at trade entry: $63.73
Price at trade close: $66.20
Current Position:
Long 4 QQQ DecWk4 70 calls
Short -4 QQQ Dec12 67 calls
Reasoning: I had closed out the put portion of the trade last week because it had: a) reached 80% of it's profit potential; and b) I thought the QQQ's were ready to trade back down. With QQQ up big today, I'm going to close out the call side of the trade for a small overall loss in order to prevent a big loss with QQQ moving higher. The current greeks are: Delta at -110, a positive theta of 7.9 and a negative vega of -10.6.
Closing Trade Details:
STC 4 QQQ DecWk4 70 calls
BTC -4 QQQ Dec12 67 calls
for a max net debit of $0.27 per contract (day order, limit order). The mid is currently at $0.24, so try to close at the mid + .01.
or, if you're sill in the original position:
STC 4 QQQ DecWk4 70 calls
BTC -4 QQQ Dec12 67 calls
STC 4 QQQ DecWk4 58 puts
BTC -4 QQQ Dec12 61 puts
for a max net debit of $0.28 per contract (day order, limit order). The mid is currently at $0.25, so try to close at the mid + .01.
Max Risk: $1064
Max Reward: $146 or 13.72% between $61 and $67 by Dec 21
Profit Range: $60.65 to $67.25 by Dec 21
Suggested Upside stop: @ $66.50
Suggested Downside stop: @ $61.25
Realized Profit / Loss: ($40.45) after commissions
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