[Closing Short Leg of Diamond Offshore (DO) Spread/Buying to Close Apr 80 Puts (DOPP)/Day Order/Limit $0.60]
Dear Member:
This action is one of the trades I love. I initially opened a bullish put spread on Diamond Offshore (DO) by selling the Apr 80 puts (DOPP) and buying the Apr 75 puts (DOPO) for a credit of $1.20 a share before commissions. Now, DO has run up and it looks like I may be able to buy back the Apr 80 puts for 60 cents. In other words, I'll give back half of what I originally took in to assure a profit in the play and I'll still own the Apr 75 puts FOR FREE! If the stock turns back down, those Apr 75 puts should gain in value and could add to my profits. If it doesn't turn back, so what, I already have a profitable trade.
I am placing an order to buy to close the Apr 80 puts (DOPP) at a limit of $0.60 on a day order.
DISCLOSURE: At the time of publication, I am short the Apr 80 puts and long the Apr 75 puts on DO.
Sincerely,
Bill Kraft for
CutLoss, Inc.
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