Stock / Symbol: Bank of America / BAC
Option Strategy: [private_monthly] diagonal call spread[/private_monthly]
Price at trade post: $10.55
Reasoning: BAC has had a real nice run and it's up nearly 50% since it's summer lows. However, it's looking a bit[private_monthly] over extended to me so I'm going to use a short diagonal[/private_monthly] to play my thesis. This trade currently has a delta of -250, a neutral theta at 0.01 and a positive vega of 1.6.[private_monthly] This is a low probability trade but there's not a lot of [private_monthly]upside risk to this trade. I'll probably stop out with BAC trading at/over $10.85. [/private_monthly]
Trade Details:
[private_monthly]
BTO 5 BAC JanWk1 11 calls
STO -5 BAC DecWk4 10 calls
for a min net credit of $0.48 per contract. The mid is currently at $0.49 (day order, limit order). If not filled today, ok to try again tomorrow.
Requirements:
Cost/Proceeds ($240)
Option Requirement $500
Total Requirements $260
Estimated Commission $15
[/private_monthly]
Max Risk: $260
Max Reward: $240 or 92% by Dec 28[private_monthly] at/under 10
Suggested Upside Stop @ $10.85
Suggested Downside Stop: NA
[/private_monthly]
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