TRADE IDEA: XLF JUNE 21ST/FEB 15TH 21/24 UPWARD CALL DIAGONAL
Metrics:
Max Loss/Buying Power Effect on Setup: 2.18/contract
Max Profit on Setup: .82/contract
Break Even: 23.18 vs. 22.81 spot
Debit Paid to Spread Width Ratio: 72.7%
Theta: .26
Delta: 37.46
Notes: Here, I'm just shopping around for particularly weak sectors in which to put on bullish assumption plays that will have plenty of time to work out and/or reduce cost basis in. Typically, I shoot for a break even at or below where the underlying is currently trading, but am settling for a <75% debit paid to spread width ratio with a less than ideal break even here than what I typically do. Consequently, I'm paying less at the door than I ordinarily would, but still have a shot at getting a 27.3% return on cap invested in the event price finishes below the short call.
Max Loss/Buying Power Effect on Setup: 2.18/contract
Max Profit on Setup: .82/contract
Break Even: 23.18 vs. 22.81 spot
Debit Paid to Spread Width Ratio: 72.7%
Theta: .26
Delta: 37.46
Notes: Here, I'm just shopping around for particularly weak sectors in which to put on bullish assumption plays that will have plenty of time to work out and/or reduce cost basis in. Typically, I shoot for a break even at or below where the underlying is currently trading, but am settling for a <75% debit paid to spread width ratio with a less than ideal break even here than what I typically do. Consequently, I'm paying less at the door than I ordinarily would, but still have a shot at getting a 27.3% return on cap invested in the event price finishes below the short call.
Trade active:
Fiddled with the strikes and expiries a bit and went with a March 29th 20/Feb 1st 23.5 for a 2.50 debit, max profit 1.00/contract, max loss/buying power effect: 2.50/contract, 71.4% debit paid to spread width ratio.
Trade closed: target reached:
Closed for a 3.00/contract debit (50% max; $50 profit; 20% ROC). Nice when they work out this quickly ... .