Stock / Symbol: Alternative Harvest / MJ
Option Strategy: Diagonal Call Spread
Trade entry date / price: 04 Jun 2020 / $14.00
Price at this post: $13.42
Reasoning: With less than 60 days till the expiration of our options on the long leg of the trade, we're going to exit here for a modest gain. Note that although MJ is still trading lower than it was when we entered the trade, we're walking away with a profit (assuming we get filled at/near our order limit).
Trade Exit Order:
STC 2 MJ 15Jan21 12 calls
BTC 2 MJ 20Nov20 14 calls
For a min net credit of $ 1.75 per contract (GTC order, limit order). The mid is currently at a credit of $1.77. I have not yet been filled.
Analysis:
Adjusted Max Risk: $340
Max Reward: $150 or 44% with MJ trading at $14 by Nov 20th
Profit Range: MJ at/over under $12.95 by Nov 20th
Estimated Commission (round trip): $7.15
Take profits @ $15
Downside stop @ $9
Anticipated Profit / Loss upon fill: $59 or 17% (pre commission)
