[Selling Calls to Create Spread on Citigroup (C)/Selling to Open Jan '08 55 Calls (WRVAK)/Day Order/Limit $1.80]
Dear Member:
Citigroup (C) has fallen off a bit and I own the Jan '08 45 calls (WRVAI). In order to reduce the risk in that position and to bring in some income, I am placing an order to sell to open the Jan '08 55 calls (WRVAK) at a limit of $1.80 for the day. If filled, that will create a Jan '08 45/55 bullish call spread and, if called out, would result in a profit of $4.10 a share before commission or a 41% return. The fact is, I intend to play in and out of the short leg as the stock fluctuates, but if it ran up quickly, the + $4.10 wouldn't be a bad result.
DISCLOSURE: At the time of publication, I am long the Jan '08 45 calls on C.
Sincerely,
Bill Kraft
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