[Opening Bearish Call Spread on "Diamonds" (DIA)/Simultaneously Selling Jul 107 Calls (DIAGC) and Buying Jul 108 Calls (DIA)/Limit $0.20 Credit]
Dear Member,
I am opening a bearish credit spread on the Diamonds (DIA) which essentially follow the Dow 30. I am selling the Jul 107 calls (DIAGC) and buying the Jul 108 calls (DIAGD) for a net credit of $0.20 before commissions. This is only a $1 spread so on 10 contracts, as an example, my risk would only be $1000 less the $200 I bring in or an net risk of $800. The return on risk if no adjustment is necessary and if the DIA stays below 107 until expiration is 25% for a month.
DISCLOSURE: At the time of publication, I have no position in the referenced options or the underlying stock.
Sincerely,
Bill Kraft for
CutLoss, Inc.
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