[Creating Spread against SPY Calls]
Dear Member:
Once again, the SPDRS S&P 500 ETF (SPY) has reached near the 145 level only to fall back. This retracement gives me the opportunity to sell some more calls against my long held Dec 140 long call position. I have repeated this process many times since I originally bought the long calls quite some time ago.
I am placing an order to sell the Jun 145 calls (SFBFO)at a limit of $0.68. If filled, this will bring in 60 cents a share in income and reduce the risk in the long position. By selling the short term out of the money calls (JUN 145 - SFBFO) I will be creating a diagonalized calendar spread against my long calls (DEC 140 - SFBLJ).
DISCLOSURE: At the time of publication, I own the Dec 140 calls on SPY.
Sincerely,
Bill Kraft
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