The stock was added to the S&P 500 as anticipated. The market looks shaky and I would be very inclined to short aggressively into the market (we just entered GES short). We will get out of the option "risk reversal" trade now.
Buy to close: March 65 strike put
Sell to close: March 75 strike call
Credit: 1.40 per risk reversal traded
We entered this trade at a debit or cost of .20 or $20 per risk reversal traded. We are taking it off and receiving a credit of 1.40 or $140 per risk reversal traded. That is a profit of 1.20 or $120 per risk reversal traded.
The margin requirement in this type of trade is 25% of the value of the underlying stock (roughly $1,750 per risk reversal). Given our margin requirements in the trade, it comes out to a 7% gain on money invested in under two (2) weeks time. To put that in dollar terms, for every $10,000 invested you have a profit of $700 in under two (2) weeks.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment