[Closing Short Leg of Sandisk (SNDK) Spread]
Dear Member:
Sandisk Corp (SNDK) stock has fallen since I entered my bearish call spread last Friday. I now have the opportunity to close just one leg of the spread, remove all risk and guarantee an 18.9% profit before commission in just 2 business days. In addition, I still own the May 47.50 calls which can add to my profit.
I am placing an order to buy to close the May 45 calls (SWFEI) at a limit of $0.30. Since I took in a credit of $0.65 when I opened the spread, I am giving 30 cents back so I will have a guaranteed profit of 35 cents a share no matter what happens. However, I still own the 47.50 calls and will have a chance to make even more if the stock price turns up. I am now in a position where I own those calls at no cost and have already enjoyed a profit on the play.
DISCLOSURE: At the time of publication, I am short the May 45 calls and long the May 47.50 calls on SNDK.
Sincerely,
Bill Kraft
|
