Stock / Symbol: Google / GOOG
Price at trade post: $1140
Option Strategy: diagonal call spread
Reasoning: With earnings due out this evening, I'm putting on slightly positive delta trade on GOOG in an effort to catch a positive earnings report. If I'm wrong, the trade structure does afford some downside protection (to about 1120). I'm using mini options to keep my max exposure to under $1,000. Also note that I'm using tomorrow's expiring weekly mini option for the short side of the trade. However, I'm going long a leap in the hope of turning this into a long term trade. The greeks on the trade are: 2.6 Delta, 64 Theta, and 41 Vega. Be sure to adhere to the posted upside and downside stops.
Trade Details:
[private_monthly]
BTO 1 GOOG Jan15 10 Mini 1150 call
STO -1 GOOG JanWk5 10 Mini 1190 call
for a max net debit of $95 per contract (day order, limit order). The mid is currently $94.25.
Requirements:
Cost/Proceeds: $950
Total Requirements $0
Estimated Commission $3
[/private_monthly]
Max Risk: $950
Max Reward: $300 or 31% (at current volatility level) at 1190 by Jan 31
Profit Range: $1120 to $1300 (at current volatility level) by Jan 31
Suggested Downside stop: @ 1099
Suggested Upside stop: @ 1250
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