OPENING: XOP JUNE 15TH 32 LONG/APRIL 20TH 35 SHORT CALL DIAGONAL
... for a 2.49/contract debit.
Metrics:
Max Profit: $51/contract* (20.5% ROC)
Max Loss: $249/contract**
Notes: As with any diagonal, there aren't many metrics to look at. If you just leave the setup alone, however, your max loss is $249/contract, and your max profit is $51/contract. Max profit is realized with a finish above the 35 strike at expiry; max loss, with a finish below 32 and no rolls of the short call to reduce cost basis.
Another way to look at the setup is that you're paying only 2.49 for a 3.00 spread ... .
* -- Assuming no short call rolls and a finish above the 35 strike.
** -- Assuming no short call rolls and a finish below the 32 strike.
Metrics:
Max Profit: $51/contract* (20.5% ROC)
Max Loss: $249/contract**
Notes: As with any diagonal, there aren't many metrics to look at. If you just leave the setup alone, however, your max loss is $249/contract, and your max profit is $51/contract. Max profit is realized with a finish above the 35 strike at expiry; max loss, with a finish below 32 and no rolls of the short call to reduce cost basis.
Another way to look at the setup is that you're paying only 2.49 for a 3.00 spread ... .
* -- Assuming no short call rolls and a finish above the 35 strike.
** -- Assuming no short call rolls and a finish below the 32 strike.
Trade active
Managing aggressively: rolling the April 20th 35 strike down to the April 27th 34.5 for a realized gain and a credit of .31/contract; cost basis at 2.18Trade closed: target reached
Pending order filled at .05 short of max profit for the existing spread -- a 2.45 credit; .27/contract profit (10.8% ROC). Had intended to roll the ITM short call for additional credit, but couldn't catch it in time.
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The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.