[Action on Diamonds Spread (DIA)]
Dear Member:
Tomorrow is options expiration day and I will be heading for New York to speak at Traders Expo on Sunday afternoon. I will be unable to send any alerts or trade myself tomorrow so I wanted to let you know my plan for the spread on the Diamonds (DIA). At the moment, DIA is trading just below 125 (currently at $124.71) so I will want to close the spread where I am short the Feb 125 calls (DAWBU) and long the Feb 126 calls (DAWBV)before expiration, but I am waiting as long as I can. Currently it looks like it would cost a debit of 38 cents to simultaneously buy to close the Feb 125s (DAWBU) and sell the 126 calls (DAWBV). I entered the position with a credit of 23 cents so that would mean a 15 cent loss. However, things could get better as time passes and I get closer to expiration, especially if the Dow falls more during the day today. I am waiting, therefore, as long as I can to close the trade, but wanted to make you aware of my plans to close both legs in case I do not make the trade until late in the day. The final result will appear in the Trade Table.
As a result of my travels tomorrow, there will be no Weekend Summary this week.
DISCLOSURE: At the time of publication, I am in the referenced spread in DIA.
Sincerely,
Bill Kraft
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