Stock / Symbol: AMC Entertainment / AMC
Strategy: Diagonal Call Spread
Entry date / price: 19 Feb 2021 / $5.65
Price at this post: $8.97
Update / Reasoning: Although AMC is up nearly 60% from the trade entry point, the position structure is unable to capitalize on such a significant move. With the Delta going from 27 to -4.7, I'm attempting to close out the trade here for just about breakeven ahead of next week's scheduled earnings announcement. Current Greeks are: -4.7 Delta, 0.9 Theta, and 1.0 Vega.
Trade Exit Order:
STC 1 AMC 21Jan22 3 call
BTC 1 AMC 05Mar21 5.5 call
For a min net credit of $2.95 per contract (GTC order, limit order). The mid is currently at a credit of $2.90. I have not yet been filled.
Analysis:
Max Risk: $295
Max Reward: $50 or 17% with AMC at $5.5 on Mar 5th
Profit Range: AMC over $5.00 by Mar 5th
Estimated Commission (round trip): $2.60
Downside Stop at: $1.90
Anticipated Profit / Loss upon Fill: $3 or 1% (pre commission)
