[Creating Spread on SPY/Selling to Open Feb 129 Calls (SPYBY)/Day Order/Limit $0.75]
Dear Member:
I already own the Dec '06 120 calls (SPYLP) on SPY. I am now placing an order to sell the Feb 129 calls (SPYBY) for 75 cents. If filled, this will bring income into my account and further reduce the risk in my LEAPS position. I did the same thing for Jan expiration as you may recall and netted 30 cents before commissions when I closed that leg. If filled, before commissions, this would represent a 5.47% return on investment for the month if I don't make any further adjustments. Selling these short term calls against my long term position creates a covered position.
DISCLOSURE: At the time of publication, I own the Dec '06 120 calls on SPY.
Sincerely,
Bill Kraft for
CutLoss, Inc.
|
