[Creating Spread against SPY LEAPS Calls]
Dear Member:
With the markets dropping, I closed my SPY '08 135 calls position for a profit earlier this morning. Now, I am going to bring in some income and reduce the risk in my Dec '08 140 calls. I am placing an order to sell to open the Dec '08 155 calls (CYYLY) at a limit of $7.30. If filled, that will cut my risk almost in half, bring in some cash, and assure a profit if SPY is above 155 and I am still in the position by expiration. As those who have followed my trades for some time undoubtedly realize, there is a high probability that I will trade in and out of this position to increase cash and decrease risk where possible.
DISCLOSURE: At the time of publication, I own the Dec 140 LEAPS calls on SPY.
Sincerely,
Bill Kraft
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