[Opening Bearish Call Spread on Diamonds (DIA)]
Dear Member:
As you probably know, the Diamonds (DIA) track the Dow. The Industrials are dropping again today on fairly significant volume fo I am going to place an order to open a bearish credit spread on the Dec DIA with 18 days until expiration.
I am placing an order simultaneously to buy to open the Dec 124 Calls (DAWLT) and sell to open the Dec 123 Calls (DAWLS) for a net credit (before commission) of $0.20. If filled, and if the DIA stays below 123 until expiration and if no adjustment becomes necessary in the meantime, this will result in a return on risk of 25% in 18 days.
DISCLOSURE: At the time of publication, I have no position in the Diamonds (DIA).
Sincerely,
Bill Kraft
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