Stock / Symbol: Bank of America / BAC
Option Strategy: [private_monthly]diagonal call spread[/private_monthly]
Price at trade post: $15.82
Reasoning: Here's a positive Delta trade on BAC using an ITM diagonal. Similar to a covered call but with higher upside potential. This trade has a delta of 130, a theta of 0.7 and a vega of 1.8.
Trade Details:[private_monthly]
BTO 2 BAC Jan16 10 calls
STO -2 BAC Feb16 16.5 calls
for a max net debit of $5.85 per contract (day order, limit order). The mid is currently at 5.83. If not filled today, ok to try again tomorrow.
Requirements:
Cost/Proceeds $1170
Total Requirements $1170
Estimated Commission $6
[/private_monthly]
Max Risk: $1170
Max Reward: $145 or 12% (at current volatility level) [private_monthly] at $16.5 by Feb 20th
Profit Range: $15.70+ by Feb 20th
Suggested Downside stop: @ $14.90
Suggested Upside stop: NA
[/private_monthly]
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