IAG ( ASX ) : options Bull Put Spread strike 5.50 net credit
Would I like to own IAG for a premium price?
If I can pick it up for 5.50 that's historically a better than fair price in past months.
However - that's only if the credit leg of options gets exercised in two weeks until expiry = plan B.
Plan A _ book a net credit on Bull Put spread, with protection ( insurance) 1 strike below at 5.25 ( -0.25c)
providing stock does not fall below 5.50 + put cost of 0.14 = 5.36 in next two weeks...
Placed trade with 80 contracts = 8000 shares @ 5.50 strike for 0.14c = +$1120 credit
Placed 80 contracts = @ 5.25 0.08 = - $ 640 debit
net credit = + $480
If I can pick it up for 5.50 that's historically a better than fair price in past months.
However - that's only if the credit leg of options gets exercised in two weeks until expiry = plan B.
Plan A _ book a net credit on Bull Put spread, with protection ( insurance) 1 strike below at 5.25 ( -0.25c)
providing stock does not fall below 5.50 + put cost of 0.14 = 5.36 in next two weeks...
Placed trade with 80 contracts = 8000 shares @ 5.50 strike for 0.14c = +$1120 credit
Placed 80 contracts = @ 5.25 0.08 = - $ 640 debit
net credit = + $480